Why Copper Prices Have Been (and Will Continue to Be) Volatile

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Copper has reached an 18-month low on the MetalMiner IndX’s Copper MMI®, taking a six-point hit from June’s numbers by dropping to 85:

copper prices

Prices declined for every single form of copper that makes up the index. In addition, prices fell in all regions including the US, China, Korea and India.

Compare with last month’s trends – here’s our free June MMI® Report.

“A plethora of events has likely impacted copper prices this past month, including a sluggish China, comments by Fed Chairman Ben Bernanke regarding a slowdown of bond-buying and a weaker manufacturing environment,” said Lisa Reisman, managing editor of MetalMiner, “but plan on a little copper volatility as the Chinese have, as we earlier reported, come back into the market to take advantage of lower copper prices.”

The LME warehousing system has created some new bottlenecks for copper as evidenced by higher spot premiums paid by Chinese traders. In addition, the cash crunch in China has led to more LME copper purchases by Chinese traders.

MetalMiner expects to see continued volatility in copper prices ahead.

Key Price Drivers

today's metal prices - MetalMiner IndXChinese bright copper scrap prices fell 11.0 percent after rising the previous month. After rising the previous month, Chinese copper wire prices dropped 8.1 percent. Chinese primary cash copper prices fell 7.9 percent after rising the previous month. After rising the previous month, Japanese primary cash copper prices dropped 7.5 percent.

Copper 3-month prices fell 7.0 percent on the LME to $6,776 per metric ton after rising the previous month. After rising the previous month, primary cash copper prices dropped 6.8 percent on the LME to $6,751 per metric ton.

The price of US copper producer grade 110 fell 5.8 percent. Following a 5.6 percent decline, the price of US copper producer grade 102 ended up lower too.

Korean copper strip – amazingly – traded sideways last month.

Don’t forget to see June 2013 price trends before July’s report comes out next week.

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.