This month’s copper price index took a beating, dropping 3 points from 99 to 96 as a result of weaker copper LME pricing, as well as domestic producer prices, China prices and China bright copper scrap prices.
“Copper remains more susceptible to market sentiment than many of the other metals we track, with the exception of precious metals,” said Lisa Reisman managing editor of MetalMiner. “When China posts negative news, the markets react quickly.”
In this case, the bad news centered on weaker-than-expected PMI data from both HSBC as well as official China manufacturing data. This caused copper prices to drop on the London Metal Exchange, but that drop reversed when outgoing China Premier Wen Jiabao offered some positive comments regarding government spending.
Goldman Sachs believes copper demand will increase in China and has even suggested purchasing September futures, as the bank has gone on record with a $9,000/ton price forecast for later this year.
Whether one buys into that analysis or not, one thing we do know – copper remains on of MetalMiner’s most volatile indexes and for that reason alone, hedging remains a viable option for many industrial buyers.
Primary Price Drivers of Copper Index
After falling 4.7 percent, the cash price of primary copper finished the month on the LME at $7,830 per metric ton. The price of US copper producer grade 110 fell 4.6 percent to $4.16 per pound. Following a 4.4 percent decline, the price of US copper producer grade 102 reached $4.35 per pound. A 3.5 percent drop over the past month left Chinese copper wire at $9,099 per metric ton. After rising the previous month, Chinese primary cash copper prices dropped 3.3 percent to $9,279 per metric ton. Chinese bright copper scrap prices dropped 2.7 percent to $7,621 per metric ton.
Last month was consistent for Korean copper strip, which did not move from $10.36 per kilogram. The Japanese copper cash price held flat over the past month at $6,851 per metric ton.
The Copper MMI® collects and weights 12 global copper metal price points to provide a unique view into copper price trends over a 30-day period. For more information on the Copper MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.