What is The Scrap Price of Copper ?
Copper prices hovered near six-year lows in London on Wednesday, as speculative investors continued to bet against the industrial metal due to demand concerns and bearish market sentiment.
The metal, long seen as an indicator of global economic health, has now fallen for five days in a row and this month to date has lost almost 9 per cent of its value.
The London Metal Exchange’s three-month copper contract was down 0.8 per cent at $US4,646.50 a metric ton in midmorning European trade, slumping to an intraday low of $US4,594.50 a ton.
Following a string of weaker-than-expected economic data out of China in recent weeks, the mood among copper investors has soured. Speculators, predominantly China-based, have been taking advantage of the negative trading environment and short selling.
“There is a very bad mood among market participants, the speculative financial investors are heavily betting on falling prices. That is probably the main aspect weighing on the copper today,” said Daniel Briesemann, a commodities analyst at Commerzbank AG.
Traders are also cautious ahead of the release of October’s Federal Open Market Committee meeting minutes later on Wednesday.
“The market will be looking for confirmation of the views expressed by the various voting members to see exactly how they are viewing the US economy and that a December rate increase is probable, and this should therefore continue to support the dollar,” said Robin Bhar, head of metals research at Société Générale SA
The market is anticipating a rise in US interest rates next month, which would be the first time in almost a decade. A shift to higher rates by the Fed could hit the US economy and slow copper demand from the world’s second-largest copper consumer after China.
Meanwhile, other base metals tumbled to multiyear lows, as bearish contagion spread across the complex.
Zinc hit a six-year low at $US1,518.50 a ton, while nickel slumped to its lowest level since December 2008 at $US9,020 a ton — almost breaching the $US9,000 mark. Lead fell to a five-year low at $US1,571 a ton.
All three metals made slight recoveries, but were trading lower. The LME’s three-month zinc contract was down 0.5 per cent at $US1,541 a ton, its three-month nickel contract was down 0.5 per cent at $US9,060 a ton, and its three-month lead contract was down 0.7 per cent at $US1,584 a ton.
Tin was also down, falling 0.3 per cent to $US14,660 a ton, although aluminum was up 0.1 per cent at $US1,476 a ton.
Base metal prices are forecast to continue heading lower on poor sentiment.
“I fear that we will see further price loss because the mood is so bad among participants, we should be prepared for lower prices, no matter the fundamentals, the market doesn’t care about fundamentals at the moment,” said Mr Briesemann.