The monthly Copper MMI® registered a value of 80 in December, a decrease of 5.9% from 85 in November.
*Note: Effective 12/1/14, MetalMiner updated some of the source data from China used to calculate this index. Therefore the December index reading appears a little more volatile when compared to the November reading. Any movements in the January reading will once again reflect only market price changes as opposed to market and source data prices changes.
Copper fell sharply in November, marking a new 4-year low. This doesn’t come as a surprise to us. As we pointed out last month, copper is the worst performer among the industrial metals in 2014 and in the face of a strong dollar and a falling commodity market, no one can say that copper has found a floor yet.
With copper at its lowest levels in 4 years, is it time to buy copper? Well, that depends on your strategy, but trying to pick up bargains is never a good strategy. At MetalMiner, we recommend you ride the falling trend and start hedging when there is confirmation that the trend is over.
The fundamentals don’t seem to differ from the price action, either. The copper market seems to be shifting into a surplus, or at least there is not a significant deficit foreseen. LME inventories remain at their lowest levels, but you shouldn’t pay attention to this, since inventories have been falling with prices since their peak in mid-2013.
Today, we see nothing confirming that copper has hit a floor. While it might look like a bargain now, it could become cheaper in 2015.
Chinese bright copper scrap prices fell 12.5% to $6,296 per metric ton. The price of Chinese copper wire fell 9.4% to $7,417 per metric ton. After falling 7.6%, the cash price of Chinese copper finished the month at $7,398 per metric ton. After rising the previous month, primary cash copper prices dropped 4.7% on the LME to $6,515 per metric ton. Copper 3-month prices fell 4.5% on the LME to $6,460 per metric ton after rising the previous month. After rising the previous month, US copper producer grade 110 prices dropped 2.9% to $3.66 per pound. US copper producer grade 102 prices fell 2.8% to $3.85 per pound after rising the previous month.
It was a strong month for the cash price of primary Japanese copper. The metal posted a 3.7% increase, finishing at $6,846 per metric ton.
Korean copper strip held pat last month at $8.69 per kilogram.
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.