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).
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.
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.
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.
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.