Copper prices will fall next year as a strengthening US dollar and weaker oil prices push down marginal production costs, according to Goldman Sachs Group Inc.
The bank lowered its 2015 price outlook to $6,217 a metric ton from $6,400, analysts including Max Layton said in a report yesterday. Marginal production cost will fall to between $5,600 and $6,300 a ton next year, according to the report.
“Stronger dollar and cheaper inputs point to lower costs and prices,” the analysts said in the report. “For commodity markets in balance or in small surplus, prices tend to trade with or around the marginal operating cost of production.”
Rising 1.6% to close at $3.76 per pound, US copper producer grade 110 price experienced the biggest change for Monday, November 17. At $3.76, the price of US copper producer grade 122 finished the market day up 1.6% per pound. The price of US copper producer grade 102 inched up 1.5% to $3.95 per pound. The Japanese copper cash price gained 0.1% to finish at JPY 809,000 ($7,431) per metric ton.
Chinese copper prices were mixed for the day. Chinese copper wire saw its price rise 1.1% to CNY 48,340 ($7,871) per metric ton. At CNY 49,060 ($7,988), the price of Chinese copper bar finished the market day up 1.0% per metric ton. The Chinese copper cash price inched up 1.0% to CNY 49,260 ($8,021) per metric ton. Chinese bright copper scrap stayed flat at around CNY 42,700 ($6,952) per metric ton.
The copper 3-month price weakened by 1.1% on the LME, settling at $6,620 per metric ton. Also on the LME, the primary copper cash price declined 1.0% to $6,690 per metric ton.