The monthly Copper MMI® registered a value of 85 in October, a decrease of 2.3% from 87 in September.
Copper is the worst performer among the industrial metals this year. Since the start of the year we’ve kept saying that there was no reason to go long on copper. Today, the metal keeps falling and seems not able to find a bottom.
Like any commodity, copper fell this month as the US Dollar moved up aggressively.
What are the fundamentals saying? Well, the copper market was in a 1st quarter deficit, according to the World Bureau of Metal Statistics. Every major global economy is now turning to manufacturing expansion (or at least manufacturing PMI readings above 50 show that).
But wait, what about warehouse stock levels? As I am writing this, they are at their lowest levels, falling 80% since their peak in June 2013. Interestingly, copper prices fell with inventory levels, dropping more than 20% since June 2013, but shouldn’t these two be moving in opposite directions? I don’t know… I guess no one told them.
What this Means For Copper Buyers
On the bearish side, supply is expected to grow and so are exports of copper concentrate from Indonesia. So, I guess that would put some downside pressure on copper prices…but again, this is all subject to opinion.
What’s not subject to opinion is what the market is telling us now, which is, stay bearish.
Monthly Copper Prices
A 3.7% drop on the LME left the copper 3-month price at $6,686 per metric ton. After falling 3.4%, the price of US copper producer grade 110 finished the month at $3.71 per pound. On the LME, the primary copper cash price fell 3.3% to $6,735 per metric ton. A 3.2% decline for the price of US copper producer grade 102 left it at $3.90 per pound. The cash price of Chinese copper declined 3.0% over the month to $8,132 per metric ton.
The cash price of primary Japanese copper rose a slight 1.7% over the past month to $7,058 per metric ton.
At a price of $9.14 per kilogram, Korean copper strip did not budge the entire month. The price of Chinese copper wire held steady around $8,209 per metric ton last month. Chinese bright copper scrap held pat last month at $7,217 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.