The price of copper has dipped below £7/kg again but seems to be holding just under £7/kg while stock levels are back near their long term average.
So what next for copper ?
Traders will not want to hold high priced stock if they think the price will drop back to long term levels under £6 / kg but as the world slowly emerges from the Covid19 pandemic will there be a surge in demand to push the price even higher ?
Share prices for miners have been in doldrums recently as investors take profits in the expectation that there will not be any further increases in the price of commodities, but the share prices are not trending down, supporting the expectation of the price of copper not dropping far below £7/kg.
How much of the price increase over the last year has fed through to consumers and how much is still filtering through the supply chain ?
It takes time to mine copper ore, process it into ingots, process those into strands of wire and other basic forms, then process those into finished products. It may well be the end of this year before the price increase from the start of the year has worked it’s way fully through the supply chain, but once established it’s hard to see manufacturers reducing their prices.
Most of us involved with buying / selling / using copper hope for a period of stability. Time will tell whether that will become a reality.