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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.

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Hawthorne Park Slot Car Cup

As a member of the Hawthorne Park slot car club I would like to thank you and your company for sponsoring the Copper Braid Cup. We finally managed to run the last round of the event last night and after some very close racing the overall winner was Ted Martin. Pete Crane will be sending you a report and pictures of the evening but I just wanted to say my personal thank you. Malcolm Walker

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Copper price stable at £6.80 / kg, for now.

For the last month the price of copper has stabilised around £6.80 / kg while bonded copper stocks slowly recover to over 200 kT

The global spread of the Covid Delta variant, and ongoing lockdowns have dampened expectations of a global economic recovery and continue to disrupt global trade.

As vaccines slowly become available to more countries Covid should become less of an economic issue but until enough of the world is vaccinated to supress Covid transmission there is always a risk of a new variant, either even more contagious or more deadly or both.

What does this mean for the future price of copper ?

Supply side is likely to remain resilient and copper producing and processing countries are more able than most to afford Covid vaccines. A bigger supply risk is probably ongoing drought conditions.

Demand side is likely to fluctuate as countries lock down in response to Covid outbreaks and there ae further trade disruptions. All eyes are on the UK at present as the first vaccinated country to open up despite a surge in infections.

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Copper price continues to climb as stocks tighten

Copper climbed to £ 7.44 / kg as stocks tightened to 118 kT.

Demand continues to exceed supply as China continues it’s infrastructure projects and North America emerges from lockdown with Europe not far behind.

Anyone making products with a higher copper content will be frantically repricing and activating LME variable clauses.

At what point will the price of copper dampen demand ? Will rising inflation lead to a new copper pricing paradigm after a decade of relatively low inflation ?

How much of the demand from China is being driven by companies using copper, and other core metals, as currency reserves to protect themselves from government control of Yuan exchange rates ?

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Price of copper and stock levels both up

The price of copper has nudged up to £6.66 / kg over the least week even though bonded stocks also increased to 169 kT.

With supply exceeding demand I expected the price to start falling, but the rapid rate of vaccination in the US and continuing economic growth in China is creating expectations of demand once again exceeding supplies.

Meanwhile Chile is experiencing a new wave of Covid infections, even though it has a successful vaccination programme using a vaccine from China. This may disrupt supplies from one of the worlds largest copper producers in the short term, but also illustrates the potential risk of vaccinations alone not stopping future Covid infection waves.

I’m still short on the price of copper and miners will be rushing to fill orders while the contract price is still over £6 / kg. Also, the larger the stocks before the price corrects the sharper the correction will be.

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Copper price steady as Stocks start to recover.

The price of copper is holding at £ 6.57 / kg as LME stocks recover to 114 kT, the first time they have been over 100 kT since January.

The copper supply chain are clearly maximising output to take advantage of the current historic high in the price of copper while demand has been cooled by the continuing impact of Covid on the global economy.

I expect the price of copper to stay high until stocks reach 150 kT and then to fall back to £5 kg as speculators unload there positions.