The monthly Copper MMI® registered a value of 85 in November, on par with October’s value.
Copper is the worst performer among the industrial metals this year. Since the start of the year, we’ve kept saying that there is no reason to go long on copper. This month, copper is near its lowest levels in 4 years. Some would argue that copper is near a support zone, but supports are there to be broken. Furthermore, we don’t see strong trading volume supporting prices during these past few weeks and this means that selling might again overcome the buying pressure, causing prices to fall more.
Fundamentals don’t seem to differ from the price action. The copper market seems to be shifting into a supply surplus, or at least there is not a significant deficit foreseen. LME inventories remain at their lowest levels, but we shouldn’t pay attention to this since inventories have been falling with prices since their peak in mid-2013.
Moreover, a rising dollar keeps putting pressure on commodities. These, like copper, are holding at their lowest levels in 4 years. Since copper lacks strong fundamentals, we wouldn’t expect copper to make significant moves upward while commodity prices remain low.
What This Means For Metal Buyers
Copper prices remain in a downtrend. Taking long-term positions in a falling market is rarely a good idea. Some might argue that prices will stabilize at this level, but prices could certainly fall further as they’ve been doing since 2011. At this point, following the trend down is the best approach to take.
This Month’s Complete Prices
The price of US copper producer grade 110 grew 1.6% to finish at $3.77 per pound. The price of US copper producer grade 102 saw its value rise 1.5% to $3.96 per pound. Finishing at $6,835 per metric ton the primary copper cash price saw a 1.5% shift lower on the LME for the month. The copper 3-month price rose 1.2% on the LME to settle at $6,765 per metric ton. After a 0.9% increase, the cash price of primary Japanese copper finished the month at $7,173 per metric ton.
The cash price of Chinese copper ended the month at $8,024 per metric ton, down from $8,024.
At a price of $9.02 per kilogram, Korean copper strip did not budge the entire month. The price of Chinese copper wire held steady around $8,205 per metric ton last month. Prices for Chinese bright copper scrap remained constant this past month, holding at around $7,213 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.