Copper Price At Record Lows: We Were Bearish, We Are Still Bearish

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The monthly Copper MMI® registered a value of 84 in April, a decrease of 4.5 percent from 88 in March.

Copper registered a 4 year low on the LME after dropping bellow $6,500 per metric ton. The reasons? Well, it could be anything…

First, rising concerns about the world’s biggest copper consumer after the release of weak Chinese economic data followed by China reporting weak trade data for the month of February. Second, the dollar showed new signs of strength in March which is generally bad for copper. Finally, the metal sector keeps showing weakness overall.

Copper_Chart_April-2014_FNL

Copper is in a bearish market and, in a bearish market bad news is exaggerated while good news is de-emphasized. We warned of this last December when we said:

“We expect prices to continue in the major trend, remaining below $7,500 per metric ton and wouldn’t be surprised to see prices reaching levels below $7,000 per metric ton.”

3M LME copper price since 2013
3M LME copper price since 2013

Copper is now trending up since the past few days but is seems like a normal reaction as it needs to digest this last drop. We would expect prices to trade bellow $7,100 for the next few months and wouldn’t be surprised if copper falls to new lows.

What This Means For Metal Buyers

Copper recorded a new 4-year low in March. The picture looks bearish and we expect copper prices to remain at low levels. Taking long term positions in a falling market seems like a bad idea. We wouldn’t suggest buyers to wait for bullish signals.

* Get the complete prices every day on the MetalMiner IndX℠

On the LME, the cash price of primary copper closed the month at $6,666 per metric ton after dropping 6.1 percent. Following a 5.3 percent decline, the copper 3-month price reached $6,652 per metric ton on the LME. A 4.8 percent drop left the price of US copper producer grade 110 at $3.74 per pound. The Japanese copper cash price fell 4.8 percent to $6,937 per metric ton. After falling 4.6 percent, the price of US copper producer grade 102 finished the month at $3.93 per pound. The cash price of Chinese copper declined 3.5 percent over the month to $7,732 per metric ton. A 3.3 percent decline for Chinese copper wire left the price at CNY 47,065 ($7,570) per metric ton.

FREE Download: The Monthly MMI® Report – covering the Copper market.

The price of Korean copper strip held steady around $10.63 per kilogram last month. Last month was consistent for Chinese bright copper scrap, which did not move from $7,125 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.

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