The Copper MMI jumped five points to 78 for our August reading, a high not seen in more than two years (the sub-index hit 79 in January 2015).
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Copper has outperformed all the other base metals this month. LME copper prices increased by 7.8% in July.
The sharp increase in copper prices came after an announcement of a possible ban of copper scrap in China by the end of the year. The increase in copper prices was accompanied by heavy volume, which may signal a stronger uptrend.
However, volumes declined during the final days of July and the beginning of August.
Source: MetalMiner analysis of FastMarkets
The U.S. dollar has shown weakness since the start of 2017. The fall of the dollar during July coincided with an increase in copper prices. A weaker dollar commonly drives non-U.S. investment into commodities that are dollar-dominated (as copper is).
The U.S. dollar remains in a strong downtrend, touching lows not seen since May 2016.
Source: MetalMiner analysis of Trading Economics
What This Means for Industrial Buyers
Even though copper prices have increased sharply this month, a price retracement could occur some time in August or September.
Copper price dynamics, together with volumes, will provide the signals to read the short- and long-term trend correctly.
Our Monthly Metal Buying Outlook informs buyers of the precise support/resistance levels (signals) to help decide when to shift buying strategy.
Free Sample Report: Our Annual Metal Buying Outlook
Actual Copper Prices and Trends
Chinese primary copper cash prices increased by 7.4% to $7,463.66/metric ton, while Indian copper prices rose by 6.7% to $6.35/kilogram. Chinese copper #2 also increased by 1.9% to $5,575.45/mt.
Prices of U.S. copper producer grade 110 and 122 increased 5.8% and 6.10%, respectively, to $3.64/pound and $3.65/pound. The price of U.S. copper producer grade 102 increased 5.5%, reaching $3.83/pound.
LME copper rose 7.7% to $6,381/mt.