Copper MMI: Copper Not Impacted by U.S.’s Retaliatory E.U. Tariffs — at Least for Now
The Copper Monthly Metals Index (MMI) held its value at 71, with around two-thirds of the metal prices in the basket staying essentially flat. Several Chinese prices registered increases of around 2%, but the gains were not enough to move the index upward.
Keep up to date on everything going on in the world of trade and tariffs via MetalMiner’s Trade Resource Center.
The LME copper price rallied until mid-month. Thereafter, the price retraced once more, but didn’t drop back quite as far as in early September.
News pertaining to slowing global growth, including slowing Chinese growth, took the metal lower.
SHFE Prices Continue to Move Sideways
SHFE copper prices continue to move in a historically narrow band around the CNY 46,000/mt to CNY 48,000/mt range, with prices just slightly above the midpoint at the end of September.
This may indicate fair demand, as prices are lacking momentum in either direction.
Copper demand growth in China looks relatively flat for 2019, with mild growth of 0.5% expected by some analysts, as recently pointed out by MetalMiner’s Stuart Burns. This contrasts with the International Copper Study Group’s (ICSG) estimate of 3% demand growth in China during H1 2019; however, the demand outlook continues to deteriorate into 2019.
Copper Supply Issues Continue to Support Prices, In Spite of Negative Demand Growth in ROW
According to the ICSG’s estimates, China’s 3% increase in demand was offset by a 3% decline in the rest of the world (ROW), making for an essentially flat-to-negative growth outlook as 2019 progresses.
Meanwhile, multiple global supply issues led to negative growth in both mined and refined copper output in 2019, with both contracting (as noted in the October MetalMiner Monthly Outlook report).
During a speech in September, World Bank President David Malpass said the nominal global growth rate looks set to slow to less than 3% this year. Further, the growth rate may not even hit the World Bank’s revised June forecast of 2.6%, indicating a much slower growth rate this year — compared with the rate of 6% during the past couple of years.
Given the metal’s price sensitivity to economic factors, prices continue to look weak despite the deficit for the metal this year, which ranges from 190,000 to 220,000 tons, according to ICSG figures for the first half of the year.
U.S. Drops Copper from the E.U. Retaliatory Tariff List
U.S.-based copper product importers received good news early in October that copper products were dropped from the list of imports to be impacted E.U. tariffs, awarded based on the European Union’s subsidization of Airbus, as ruled on by the World Trade Organization (WTO).
Final approval of the U.S. plan looks set to occur mid-month, with implementation of the tariffs still on that list targeted for Oct. 18.
However, the U.S. appears to maintain some bandwidth to impose additional duties at a later date. The case will continue into the foreseeable future, with other factors still in play dragging out a final outcome.
Industrial buying organizations need to continue to track the case.
What This Means for Industrial Buyers
U.S.-based importers of E.U. copper products received news that copper products were dropped from the final list of products to be impacted by the imposition of WTO-granted tariffs on various products from a handful of European countries. Still, importers of the metal need to remain on alert for potential revisions.
Meanwhile, copper prices stayed flat this month. Industrial buying organizations need to be aware that demand conditions could shift and impact prices at any time, as a lack of clarity pervades the market at this time.
Want an easier solution for tracking industrial metals prices and trade news? Request a demo of the MetalMiner Insights platform.
Buying organizations seeking more insight into longer-term copper price trends should read MetalMiner’s Annual Metal Buying Outlook.
Free Partial Sample Report: 2020 MetalMiner Annual Metals Outlook
Actual Copper Prices and Trends
This month, copper prices stopped dropping. The majority of Chinese prices recorded increases of around 2%, stopping the declining price trend that beset the index in July and August. ROW prices stayed essentially flat.
China’s primary cash price increased 2.2% to $6,629/mt, while copper wire price increase by 2.1% to $6,617/mt. Copper bar prices increased by 1.9% to $6,604/mt. China’s copper #2 price increased by 0.3% to $5,372/mt.
Korean copper strip increased by 0.8% to $7.85 per kilogram.
Japan’s primary cash price increased 0.6% to $5,912/mt.
The LME primary three-month price stayed flat with a mild 0.1% increase to $5,640/mt.
U.S. producer copper grades 110 and grade 122 both remained at $3.34 per pound, while grade 102 remained at $3.56 per pound.
Looking for metal price forecasting and data analysis in one easy-to-use platform? Inquire about MetalMiner Insights today!
Only Indian copper cash prices dropped, falling by 0.2% to $6.13 per kilogram.
Leave a Reply