Traders have expressed surprise at coppers price decline
over the past week as Comex values fell again June
The July Comex
contract, the most actively traded, settled at $3.241 per pound
June 10, down almost 3 cents from $3.2685 June 7 and the lowest
level since May 2. Prices have fallen steadily from $3.3715 per
pound June 5.
"I dont know why
the price dropped, given (physical) market conditions," one
trader source told AMM. "Theres a stronger
demand plus problems with producers. (The market) is stronger
than it looks."
Traders cited PT
Freeport Indonesias closure of the Grasberg copper mine
last week (
amm.com, June 4), as well as the wall
slide at Kennecott Utah Coppers Bingham Canyon Mine in
amm.com, April 11) as reasons why demand, and
therefore prices, should be higher.
interruptions caused by the outages at Grasberg and Bingham
Canyon have been offset by macroeconomic factors such as weaker
than expected U.S. unemployment figures last week and
disappointing Chinese economic data over the weekend, analysts
ability to meet its contractual obligations in June (
amm.com, May 29) despite having previously
declared force majeure could be a sign that the impact
on supply might be delayed until later this year, a second
"I spoke to a client
and they are having no problem getting material, they have some
long-time contracts for support," he said.
"The market is
standing back and waiting either for the demand in China to
rebound more or for the recent supply (issues) to have an
effect on the market," an analyst said.
Traders dont see
prices going above $3.31 per pound in the next couple of weeks,
"Its sort of
flat but its not falling too fast, so Im not
concerned," according to a third trader.
Summer is typically a
slow time of the year for copper, traders said. But this is an
exceptionally slow market.
"Its been slower
than usual for this time of year for the past three months,"
the third trader said.