Copper MMI: LME Copper Prices Breach $6,000/MT

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Charles/Adobe Stock

In October, the Copper Monthly Metals Index (MMI) increased four points, recovering to August 2018 levels.

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The latest Copper MMI latest increase came from stronger LME copper prices in September. The current Copper MMI stands at 77 points.

LME copper prices recovered momentum in September and increased sharply. The LME copper price breached the $6,000/mt level.

Source: MetalMiner analysis of Fastmarkets

Readers may want to remember that the $6,000/mt level served as a price ceiling in 2017. Prices climbed toward that ceiling several times during 2017, but failed to breach it. However, prices skyrocketed in August 2017 when copper prices breached the ceiling. Copper has remained in a long-term uptrend since then.

In June 2018, copper prices started to fall. LME copper prices entered a short-term downtrend, which appears to have switched. LME copper prices increased sharply in September, and have continued to increase in October.

Despite concerns about a Chinese economic slowdown and Chinese manufacturing (with a falling Chinese Caixin Manufacturing PMI), copper looks stronger.

Despite an easing of supply in Chilean mines, copper remains in a 45,000-ton deficit. In fact, miner BHP forecasts an increase in copper demand.

The miner analyzed Chinese overseas construction projects, noting copper demand could grow by 1.6 million tons, or 7% of annual demand. If Chinese demand starts increasing again, the copper supply-and-demand balance may fall into a wider deficit and prices may find some additional support.

Chinese Copper Scrap

LME copper prices and Chinese copper scrap prices tend to follow the same trend. However, prices traded differently this month.

LME copper prices increased sharply, while copper scrap prices fell slightly. However, copper scrap price momentum appears to have recovered. Scrap prices could increase in the short term.

Source: MetalMiner data from MetalMiner IndX(™)

The spread has widened again. The wider the spread, the higher the copper scrap consumption and, therefore, the price.

What This Means for Industrial Buyers

LME copper prices showed strength this month.

Buying organizations will  want to understand how to react to the latest copper price movements. Adapting the right buying strategy is crucial for reducing risks. Only the MetalMiner monthly outlooks provide a continually updated snapshot of the market from which buying organizations can determine when and how much to buy of the underlying metal.

For more information on how to mitigate price risk year-round, request a free trial to our Monthly Metal Buying Outlook.

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Actual Copper Prices and Trends

In September, most of the prices comprising the Copper MMI basket increased.

LME copper rose by 5.30% this month. Indian copper prices increased by 4.99%, while Chinese primary copper prices increased 5.18%.

Prices of U.S. copper producer grades 110 and 122 increased by 5.58%. Meanwhile, the price of U.S. copper producer grade 102 increased by 5.30%, up to $3.74/pound.

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