While the price of iron ore has fallen to multiyear lows, copper has held up remarkably well, writes Daniel Rohr, CFA, of Morningstar. That will change in 2015 as both copper and iron ore are tied to Chinese real estate demand.
Rohr writes that as China’s real estate starts have fallen this year, iron ore was first to feel the pain. Copper will be next.
With a decline of 2.2% to JPY 790,000 ($6,638) per metric ton on Friday, December 12, the cash price of Japanese copper recorded the biggest decline of the day. The price of US copper producer grade 110 rose 0.8% to $3.65 per pound. At $3.65, the price of US copper producer grade 122 finished the market day up 0.8% per pound. The price of US copper producer grade 102 increased 0.8% to $3.84 per pound.
Chinese copper closed mixed last Friday. Chinese copper bar finished the day up 0.3% to CNY 47,880 ($7,731) per metric ton. The cash price of Chinese copper inched up 0.3% to CNY 48,080 ($7,763) per metric ton. At CNY 47,010 ($7,591), the price of Chinese copper wire finished the market day up 0.1% per metric ton. Chinese bright copper scrap held its value last Friday at CNY 40,700 ($6,572) per metric ton.
The primary copper cash price remained essentially flat on the LME at $6,471 per metric ton. The copper 3-month price saw little movement last Friday on the LME, closing out around $6,422 per metric ton.