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Copper price steady as stocks fall to crisis point

LME bonded stocks have fallen to 76kT, close to their lowest ever level of 73kT in February this year. How much further can they fall before the price of copper soars again ?

At £7.18 / kg the price of copper is still in the range of where it has been since May this year.

New Covid variants and continuing supply chain issues are still preventing the copper market from operating smoothly, which increases the risk of delayed overreaction by the markets.

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Standard Policar meeting 30th October 2021 report and results

Standard Policar meeting 30th October 2021

Big thanks to our meeting sponsors who added so much to the day:

  • Copper Braid Products Limited who are the long term sponsors of our club
    and provided all the great trophies.
  • Andi Rowland who supplied a brand new boxed Policar as a raffle prize.
  • Pendle Slot Racing who always support our meetings and sent some
    seriously good vouchers to use at the world’s best slot car one stop shop.

Jeff Norton was the lucky winner of the new Policar raffle prize.

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Copper stocks fall as price remains stable at £9.88 / kg

LME bonded Copper stocks have fallen to 115 kT, where they were last May, when the price of copper shot up from £5/kg to £7/kg.

Whether we are about to see another £2/kg jump in the price of copper depends on what is agreed at the COP summit. If the delegates agree to a wide range of decarbonisation initiatives that require copper then expect the price of copper to jump. However, if they agree mitigation measures, such as financing sea walls, then there will not be as much demand for copper. If they fail to reach agreement then the question will be, what next ?

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Copper back to £7.39 / kg as stocks drop to 172 kT

Reports today that the LME have had to step in to ensure market liquidity after Trafigura, which is one of the world’s biggest commodities traders, has emerged as one of the market players that have been withdrawing copper stocks from warehouses.

“In a very tight copper market with strong demand outstripping available supply, Trafigura has drawn down inventory to deliver it to end-users, primarily in major consumption areas in Asia and Europe.”

The question now is what impact this will have on the stability of the market and the future price of copper?

LME Copper stocks have been lower, back in March they were down to 74 kT, but it’s the speed of movement that seems to alarmed the market. Is the increased use of electronic trading making the market more unstable or is this a result of supply chain issues ?

I expect the price of copper to settle back to £7/kg but global supply chain issues and electronic trading will make prices less stable than before the pandemic.

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Copper price £ 6.69 /KG bonded stocks 239 kT

The price of copper has eased over the last month as global trade disruption stalls economic growth.

Stocks have also eased back to where they were in August, again caused by global trade issues.

The situation is unlikely to change until global trade is running smoothly once again and shipping times return to normal.