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Copper Price Lowest Since Nov 2020

Copper prices have fallen into a decline again since the low in 2020.  This is due to aggressive interest rates, a rise in covid-19 cases in China, potential recession, and rising inventories. The price for delivery in September has fallen 4.8% from Monday’s settlement and is currently at $3.43 per pound ($7,546 per tonne). This is the lowest it has been since November of 2020. While this is a decline, it is important to note that the market is still higher than it was at the beginning of the year.  There are several reasons for the decline in copper prices.

The first reason is aggressive interest rates. The rise in rates has caused a decrease in demand for copper as a construction material as well as for electrical applications. This is because it becomes more expensive to borrow money to buy copper for manufacturing. The second reason is the recent surge in covid-19 cases in China. Many steelworkers are sick. Workers have been laid off or unable to travel due to weather conditions, quarantines, and health concerns. The existence of the US dollar has caused a decline in demand as factories slow down production owing to quarantines and staff being ill. The third reason is the prospect of an economic recession in the United States. The fourth and most important reason is increased inventories. This is due to the fall in manufacturing and a dearth of fresh orders.

 Despite all of these reasons for the decline in copper prices, copper stocks in LME-approved warehouses are on the rise.  They have jumped from 10,100 tonnes to 136,950 tonnes in the past week. This is a rise of more than 20%. It is important to keep an eye on these trends in order to make informed decisions about mining and investing in copper.

This post was written by Justin Tidd, Director at Becker/SMC. For nearly a half a century, Becker Mining has been at the forefront of safety, producing the best ground fault relay in the industry. Becker/SMC is the industry’s leader in increasingly more sophisticated electrical control systems. Most of the major innovations, design features and specialized electrical components have been developed by Becker/SMC.

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