Homescrap-metal-pricesFuture Price of Copper – Up or Down?

As per -What are the prospects for the copper price for the remainder of this year? In a word – uncertain. Having risen so far, so fast this year – the LME three-month contract has gone up by more than 100% since the start of 2009 – a price correction looks overdue. However, two dynamics are currently keeping the market on its toes – the ups and downs of China’s copper import demand, and the shape of the recovery in the OECD region. How these dynamics shape up in Q4 2009 will help determine whether or not copper ends this year with a bang, or a whimper.

As of mid-October the copper market has been trying to work out whether improved economic sentiment has been excessively optimistic, and has priced-in too rapid and too vigorous a global economic recovery. The fact that the copper price has stabilized at around $6,100/t (+/- $400/t), while China’s refined imports of copper declined month-on-month in July and August – against a succession of monthly record imports in prior months – and rising LME copper warehouse stocks, implies that sentiment is still very positive regarding copper’s mid to long-term fundamentals.

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