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Copper price regained momentum in October-2018 China(Guangzhou)Int¡¯l Non-Ferrous Metal£¨Copper£©Exhibition
10/18/2017 Copper exhibition -non-ferrous metals expo |
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Market Realist reported that copper prices have regained momentum in October after showing weakness in the last month. So far, copper has risen 4.9% in October based on the closing prices on October 12. Copper fell 4.2% in the last month. Although copper is still below its 2017 highs that it hit in the beginning of September, it¡¯s still trading with handsome year-to-date gains of 24.1%.
Other base metals including aluminum and zinc are also trading with strong gains this year. However, seaborne iron ore prices have shown weakness due to concerns about a slowdown in Chinese demand.
Copper mining companies have also followed copper higher. The rise in copper prices is a welcome break for copper miners like Freeport-McMoRan, Glencore and First Quantum Minerals. We should remember that copper prices were in a long-term bear market after prices peaked near USD 10,000 per metric tonne in 2011.
Copper has been on a losing streak since 2011. Before 2016, LME (London Metal Exchange) copper prices fell every year since 2011. In 2012, copper managed to hold steady and closed roughly flat compared to the previous year. However, copper¡¯s five-year drought ended last year when it rose 17.4%. Concerns eased about China¡¯s slowdown and President Trump¡¯s election fueled hopes of more growth in the US which boosted metal prices.
In this series, we¡¯ll look at some of the key factors that are impacting copper prices this month. We¡¯ll also analyze whether copper¡¯s upwards price action is backed by fundamentals. We¡¯ll see if the markets are getting a little carried away with copper¡¯s outlook.
Copper prices have been strong this month. Despite short-term fluctuations, copper prices have been reasonably bullish for the past year. The bullishness is driven by the expected supply-side led deficit. Most analysts expect copper¡¯s supply to fall short of demand by the end of the decade.
Copper¡¯s supply-side dynamics are different from some of the other metals. Copper miners need to replenish their falling reserves with new mines . Some of the leading copper mines including those owned by BHP Billiton have seen falling ore grades in the past few years. While there are some previously planned expansion projects that are expected to come online in the next few years, new exploration activity has been virtually at a halt in the last few years due to lower copper prices.
Global copper demand could continue to rise in the coming years. However, the growth rates might not be as high as we saw in previous years as China transitions from an investment-driven to a consumption-driven economy. Meanwhile, some observers expect global copper demand to get a boost from electric vehicles. Copper intensity is higher in electric vehicles. While 23 kg (kilograms) of copper is used in an internal combustion engine vehicle, a hybrid electric vehicle uses 40 kg of copper, according to the International Copper Association. The copper content is even higher in plug-in hybrid electric vehicles and battery electric vehicles at 60 kg and 83 kg, respectively.
-2018 China(Guangzhou)Int¡¯l Non-Ferrous Metal£¨Copper£©Exhibition
-Non-Ferrous Metal exhibition, 2018
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