China has in recent years been viewed as the main driver of the global copper market, and while its influence remains strong, it’s possible that the rest of the world, particularly the US, will take over in the short term, Reuters says.
Copper is currently one of the more divisive commodities among analysts, with opinions split over whether the industrial metal will continue its recent rally or lose ground over the rest of 2014.
The point is that considerable uncertainty exists over copper’s direction and much of that comes down to whatever view is held about the economic outlook for China, which consumes roughly 45 percent of the world’s copper. That leaves 55 percent elsewhere. Copper’s recent gains have largely been attributed to an improving outlook for growth in the US and hopes that Europe may take steps to stimulate its struggling economies.
With a 13.2 percent increase over the past day, the price of US copper producer grade 122 was the biggest mover, closing at $4.42 per pound on Tuesday, August 26. The cash price of primary Japanese copper inched up 1.2 percent to JPY 771,000 ($7,408) per metric ton. The price of US copper producer grade 110 rose 0.5 percent to $3.92 per pound. At $4.11, the price of US copper producer grade 102 finished the market day up 0.5 percent per pound.
Chinese copper prices were mixed for the day. Chinese copper bar finished the day down 0.3 percent to CNY 52,050 ($8,457) per metric ton. The cash price of Chinese copper weakened by 0.3 percent, settling at CNY 52,250 ($8,490) per metric ton. The price of Chinese copper wire continues hovering around CNY 50,395 ($8,188) per metric ton for the fifth day in a row. For the fifth consecutive day, the price of Chinese bright copper scrap held flat at CNY 44,300 ($7,198) per metric ton.
After a couple of days of improving prices on the LME, the copper 3-month price held steady at $7,075. Following a two-day rise on the LME, the cash price of primary copper flattened at $7,088.