Caterpillar Inc. (CAT) reported a 45% decline in profits for last quarter, and as a principal bellwether for the metals markets, this drop is reflected in copper’s recent troubles.
An analyst for William Blair & Co., quoted by Bloomberg, attributed Cat’s profit drop primarily to “slower global growth than initially expected, principally driven by a weaker mining outlook.” China has a lot to do with this, as its manufacturing PMI numbers have underwhelmed of late. BHP Billiton and other mining majors are therefore cutting back on mining capex for the balance of the year – if not beyond.
Although Caterpillar CEO Doug Oberhelman is calling a floor on the mining market that’s just around the corner, others are not convinced that another recession won’t hit full-on in 2014.
Weekly Copper Price Trends
The biggest mover on the weekly Copper MMI® was the Japanese copper cash price, which saw a 8.1 percent decline. This comes on the heels of a 22.2 percent increase the week before.
Following a 2.5 percent increase in the week prior, the price of US copper producer grade 122 fell 5.4 percent last week. The price of US copper producer grade 110 fell 5.4 percent after rising 2.5 percent the week before. Following a 2.4 percent increase in the week prior, the price of US copper producer grade 102 fell 5.2 percent last week. Following a steady week, prices for Korean copper strip closed flat.
The price of Chinese copper wire fell 7.7 percent after rising 1.2 percent the week before. Following a 0.9 percent increase in the week prior, the price of Chinese copper bar fell 7.4 percent last week. The Chinese copper cash price fell 7.4 percent after rising 0.9 percent the week before. Chinese bright copper scrap weakened by 7.1 percent.
Following a 2.4 percent increase in the week prior, the cash price of primary copper fell 7.3 percent on the LME last week to $6,962 per metric ton. The 3-month price of copper fell 7.3 percent on the LME to $6,995 per metric ton after rising 2.3 percent the week before.
The Copper MMI® collects and weights 12 global copper metal price points to provide a unique view into copper price trends. 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.