copper price

The Copper Monthly Metal Index (MMI) came in again at 79. Nearly all of the prices in the copper basket fell this month, with price declines in the range of 0.3%–1.9%.

Need buying strategies for steel in 2019? MetalMiner’s Annual Outlook has what you need

LME copper prices moved sideways during the month and oscillated around $6,424/mt, struggling to hold on to the $6,500 level (despite hitting that price at multiple points throughout the month).

On the other hand, the price generally stayed above the longer-term resistance point of $6,380/mt. The price briefly dropped back later in the month before surging again, then sliding once again into early April.

Source: MetalMiner analysis of FastMarkets

LME copper prices trended upward rapidly at the start of 2019 on concerns over supply.

While the correlation between actual warehouse stocks and pricing generally falls outside of the factors driving actual LME copper prices, as pointed out in the most recent Monthly Metal Buying Outlook Report, recently traders traded on this information as warehouse stocks dwindled to historical lows.

Another key factor driving the perception of a potential shortage of the metal could be that supply and demand factors do not presently balance, with a multiyear production deficit of refined copper, as reported by the International Copper Study Group (ICSG).

What This Means for Industrial Buyers

While the bullish copper run ran out of steam by March when the price traded sideways, some of the increase in price from earlier in the year held, with prices now oscillating around a higher short-term level.

However, the market remains in a sideways trend.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

Actual Copper Prices and Trends

In March, most of the prices in the basket dropped, with the exception of Korean copper strip, which increased by 3.6%.

The Chinese prices in the basket showed the largest declines, albeit modest, in the range of 0.3%-1.9%.

Japanese primary cash and Indian copper cash prices declined as well, by 0.8% and 0.9%, respectively. U.S. prices for copper producer grades 110, 102 and 122 were down by 0.5%.

It’s important for buying organizations to understand how to react to copper price movements. The MetalMiner Monthly Outlook report helps buyers understand the copper marketplace.

vadiml/Adobe Stock

This morning in metals news, the copper price fell again, stocks picked up Thursday as U.S.-China trade talks continued and shares of Reliance Steel are up 31% this year.

Has Copper Hit a Wall?

The London copper price had been enjoying an upward trajectory from the start of the year through most of February, but that trend seems to have run out of steam.

LME copper price. Source: LME

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Since late February, the metal has been trading mostly sideways, but on Thursday’s session fell again on weak German manufacturing data, Reuters reported.

In addition, the situation at the Las Bambas copper mine in Peru escalated, as a judge ordered jail time for lawyers who represented indigenous villagers who blockaded the mine in protest, according to the Reuters report.

Stocks Up on U.S.-China Talks

The ongoing trade talks between the U.S. and China continued this week in Washington following last week’s sessions in Beijing; once again, markets are showing great sensitivity to any semblance of good (or bad) news out of the negotiations.

Stocks were mostly slightly up Thursday, MarketWatch reported.

Reliance Steel Shares on the Rise

Metals service center operator Reliance Steel has seen its shares surge 31% in the year to date, according to Zacks Equity Research.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

According to the Zacks analysis, the company has benefited from its focus on high-margin products, and has seen strong demand in the aerospace and automotive markets.

freshidea/Adobe Stock

This morning in metals news, U.S. Treasury Secretary Steven Mnuchin tweeted Friday that this week’s round of trade talks with China were “constructive,” LME copper is on its way for its first quarterly gain since the end of 2017 and China’s imports of copper are forecast to dip this year.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

U.S.-China Talks Continue

Markets reacted positively late this week on optimism from the latest round of U.S.-China trade talks, this time held in Beijing over Thursday and Friday.

U.S. Treasury Secretary Steven Mnuchin tweeted that the talks were constructive.

As Mnuchin noted, trade talks are scheduled to continue next week in Washington, D.C.

Copper Makes Gains

According to Reuters, LME copper is set to notch its first quarterly gain since the end of 2017.

Copper stockpiles in LME-registered warehouses are moving toward 11-year lows, according to the report.

China Copper Imports

Speaking of copper, China is expected to import far less of the metal in 2019, according to a Reuters report citing research house Antaike.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

According to the report, China’s copper imports are forecast to fall 14.7% on account of increased domestic production.

Zerophoto/Adobe Stock

This morning in metals news, the Canadian government announced it is rolling out $100 million in funding for its domestic steel and aluminum industries, copper moves toward a seven-month high, and Vietnam’s steel exports to the U.S. increased in 2018.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Canadian Steel, Aluminum Get a Boost

The Canadian government has announced it will offer $100 million in funding to small- and medium-sized aluminum and steel firms in the country, the CBC reported.

The U.S.’s Section 232 tariffs on steel and aluminum remain in place for NAFTA partners Canada and Mexico. Those tariffs are the primary point of contention as the successor to NAFTA — the United States-Mexico-Canada Agreement (USMCA) — still needs to be ratified by the three countries’ legislatures.

Copper Continues Hot Streak

The copper price moved toward a seven-month high on Tuesday, Reuters reported.

LME copper jumped 1% to $6,472.50 per ton, according to the report.

Vietnam Steel Sector Grows

Despite the U.S.’s aforementioned Section 232 tariffs, one southeast Asian country saw its steel exports to the U.S. rise last year.

Want to a see Cold Rolled price forecast? Get two monthly reports for free!

According to an S&P Global Platts report, Vietnam’s finished steel exports to the U.S. surged 48% in 2018 compared to 2017.

On the heels of the doldrums of December, metals prices have made gains through the first two months in 2019.

Buying Aluminum in 2019? Download MetalMiner’s free annual price outlook

February was an especially strong month for a number of metals.

However, markets are especially sensitive to any snippets of news coming out of the ongoing U.S.-China trade talks. President Donald Trump recently delayed the March 1 deadline for a planned tariff rate increase as talks continued.

Whether the two countries reach a meaningful deal anytime soon remains to be seen; as of now, however, metals prices are enjoying a bit of upward momentum.

Read more

In January, the Copper Monthly Metals Index (MMI) dropped 3.9%, falling back 3 points to the November 2018 level of 74. Lower LME copper prices drove the index lower.

Need buying strategies for copper? Request your two-month free trial of MetalMiner’s Outlook

Similar to other base metals, LME copper prices fell in December. LME copper prices fell below the $6,000/mt level, which served as a stiff resistance level for most of 2017. Prices over this level indicate a bullish copper market, while prices below that level signal a more bearish trend. This level has represented a psychological signal for “Doctor Copper” since 2017.  

LME Copper prices. Source: MetalMiner analysis of Fastmarkets

So far in January, LME copper prices have increased. However, current levels remain below that $6,000/mt psychological ceiling. Trading volume also appears weaker, which does not support a sharp uptrend.

Global Copper Outlook

According to data released in January, Chilean copper production reached 540,720 tons in November, the highest level in 13 years. The increase was driven by higher ore grades and more efficient processes. As reported by Chile’s national statistics agency INE, copper production increased 7% in November versus October. Production reached its highest levels  since December 2005.

Anglo American announced that overall production will increase more than expected between 2018-2021. Forecasts suggest 2018 production increased by 2%, driven by increases in copper output. 2019 production could increase by another 3%, and 2020-2021 production by an additional 5%.

Despite this forecast by Anglo American, the International Copper Study Group (ICSG) announced a wider deficit in September. The global refined copper deficit increased to 168,000 tons in September from the previous 43,000 tons in August. For the first nine months of 2018, the market saw a 595,000-ton deficit versus the previous year’s deficit of 226,000 tons.

Chinese Scrap Copper

LME copper prices and Chinese copper scrap prices tend to follow the same trend. However, this month they traded differently. LME copper prices fell while Chinese copper scrap prices increased. The divergence between LME copper prices and Chinese copper scrap has become more notable recently, driven by lower scrap availability in China.

Source: MetalMiner data from MetalMiner IndX(™)

The spread has become smaller this month. The wider the spread, the higher the copper scrap consumption, and therefore, the price.

What This Means for Industrial Buyers

LME copper prices fell this month, moving below the $6,000/mt level. Buying organizations will want to understand how to react to the latest copper price movements. Adapting the “right” buying strategy becomes crucial to reduce risks. Only MetalMiner’s Monthly Outlook reports provide a continuously updated snapshot of the market from which buying organizations can determine when and how much of the underlying metal to buy.

Click here for more info on how to mitigate price risk all year round — and get a free 2-month trial to our Monthly Metal Buying Outlook.

Actual Copper Prices and Trends

In December, most of the prices that comprise the Copper MMI basket fell. LME copper decreased by 4.87% this month. Indian copper prices also fell by 5.91%, while Chinese cash primary copper prices decreased by 3.83%. Prices of U.S. copper producer grades 110 and 122 fell by 3.36%. Meanwhile, the price of U.S. copper producer grade 102 decreased by 3.2%, to $3.64/pound.

In July, the Copper Monthly Metals Index (MMI) fell by three points, falling to its lowest value since October 2017. The Copper MMI currently stands at 81 points. The decrease came as a result of falling LME copper prices as well as other elements that make up the Copper MMI.

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

Source: MetalMiner analysis of FastMarkets

So far, LME copper prices have followed last month’s downtrend.

LME copper prices have remained in a short-term downtrend since prices peaked in June at $7,316/mt. Since then, LME copper prices have fallen by more than 12%.

The downtrend appears sharp, as copper prices have fallen to October 2017 levels. However, trading volumes do not appear in the same sharp downtrend, instead looking flat. Therefore, copper prices may just be seeing a bigger buying dip, caused by weaker summer demand and trade tensions.

Trade Tensions Also Affecting Copper

Copper prices have also struggled this month due to trade tensions between China and the U.S.

China accounts for almost half of global copper consumption, estimated at around 24 million tons. Fewer Chinese exports also affect copper prices.

Copper investors seek to reduce risk until the trade tension abates. This, together with weaker demand in China, have supported the downtrend.

Chinese Scrap Copper

Since the announcement of the ban on copper scrap in China last summer, MetalMiner has followed Chinese copper scrap prices closely.

Source: MetalMiner data from MetalMiner IndX(™)

LME copper prices and Chinese copper scrap prices tend to follow the same trend. Both appear to be in a long-term uptrend. However, both LME copper and scrap copper prices fell again this month. Despite both following the same short-term downtrend, the spread has widened. The wider the spread, the higher the copper scrap consumption, and therefore, the price.

However, Chinese the copper scrap ban has boosted copper production in other forms.

In May, Chinese copper imports reached their highest levels in 17 months, with imports totaling 475,000 tons of unwrought copper and copper products. Strong manufacturing and construction sectors have led Chinese demand.

What This Means for Industrial Buyers

Despite the recent dip, LME copper prices remain in a long-term uptrend.

Buying organizations reading the Metal Monthly Outlook had the opportunity to identify a buying signal at the beginning of April and reduce price risk by purchasing some volume. For those who want to understand how to reduce risks, take a free trial now to the MetalMiner Monthly Outlook.

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

Actual Copper Prices and Trends

In July, most of the prices comprising the Copper MMI basket decreased.

LME copper fell by 2.77% this month. Indian copper prices decreased by 2.81%, while Chinese primary copper prices fell further by 3.40%.

Prices of U.S. copper producer grades 110 and 122 decreased by 2.62%. Meanwhile, the price of U.S. copper producer grade 102 fell by 2.49%, to $3.91/pound.

The ongoing turmoil over Donald Trump has increased investors’ worries over political stability in the U.S. In addition, investors worry that under these political turbulences, the Trump administration will struggle to implement pro-growth initiatives.

The dollar is one asset that was affected by the news, falling to a 6-month low. Investors have been selling dollars and buying euros as political risks rise in the U.S. and, following the French elections, fall in Europe.

Two-Month Trial: Metal Buying Outlook

Usually, a falling dollar would give a boost to industrial metal prices, but that wasn’t the case here. Precious metals like gold did benefit from a falling dollar, but it didn’t prevent base metals from declining. This is because investors are now focused on what looks like a slow down in China.

Investors were disappointed when China’s Caixin Manufacturing PMI came at 50.3 in April, the lowest reading since September 2016. In addition, as Beijing talks about curbing credit, investors have come to realize that lower funding for the construction of infrastructure projects will hurt demand for industrial metals.

Just about two weeks ago we noticed that commodity markets were getting in trouble. As time goes on, that weakness is spreading out into industrial metals. Some specific metals are holding their value better than others due to their specific supply narrative, but overall we would expect them to move in tandem, as they always do. Here are some charts suggesting that the bull cycle in industrial metals could be ending:

Nickel falls to a 10-month low. Source: MetalMiner analysis of fastmarkets.com data

Read more

Copper prices took a hit in May because of a surge in LME inventories. Or… was it because of that?

I’ve pointed out this before, but people continue to talk about copper stocks to explain price movements. LME inventories rose in May by 64,000 tons, or 25%, at the same time that prices fell. But that’s simply a coincidence.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

Most of the time, inventory inflows and outflows can simply happen because traders move metal from one destination to another to profit from price arbitrages. Indeed, in November copper prices climbed 20% while LME stocks rose by more than 90,000 tons. I would argue that inventory levels have no predictability on price trends. But then what drove copper prices down?

China to Halt Credit Growth

China is putting efforts on halting risky lending and rising borrowing costs in order to limit credit growth. Interest rates in China have risen to the highest level in two years while the country’s tough talks on curbing credit are expected to put the brakes on credit growth.

As I wrote last week, “the noticeable tightening in Chinese monetary policy is bad news for property markets in China. The country has also pledged to halt risky local funding on the construction of infrastructure projects. Investors know that this will hurt demand for commodities and industrial metals.” Read more

Our Copper MMI fell by two points in April, dragged down by a sell-off in industrial metals. In addition, supply concerns have eased as strikes at some mines ended.

Benchmark Your Current Metal Price by Grade, Shape and Alloy: See How it Stacks Up

The strike at Escondida in Chile, the world’s largest copper mine, ended in late March. Soon after, a 18-day strike at the Cerro Verde mine in Peru also came to an end. A new strike at the mining company Southern Copper Corp. in Peru took place in April, but it lasted only two weeks, leaving no significant effect on production.

Meanwhile, Freeport McMoRan finally obtained a permit to export material from its Grasberg mine, the second largest copper mine in the world. The new permit will allow the company to export 1.1 million tons of copper concentrate through February of next year.

However, Freeport now has a new problem on its hands. Workers have threatened a one-month strike starting in May. The company had laid off about 10% of its workers, saying that there may be more layoffs in the future to stem losses. Moreover, the company is still confronting Indonesia over rights to the mine. With this problematic combination of protests from workers and tensions with the Indonesian government, it’s no wonder that investors are concerned about further supply disruptions this year.

What This Means For Metal Buyers

Although supply disruptions eased in March and April, there is overall plenty of potential for further disruptions this year. Prices took a dip in April, but that seems to be a normal price action given that most industrial metals fell in the same month.

Free Sample Report: Our Annual Metal Buying Outlook

After a spectacular rally in Q4 of last year, prices are now consolidating in the price range of $5,500-$6,100/mt. Bulls seems still in control but they probably need another bullish development to chase prices above this price range. That development could come in the for of additional supply disruptions this year. We will be watching closely the developments at the Grasberg mine in the coming week in addition to the several mines that have contract negotiations due to this year.

Actual Copper Prices and Trends