NEW YORK Traders have expressed surprise at coppers price decline over the past week as Comex values fell again June 10.
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 April (amm.com, April 11) as reasons why demand, and therefore prices, should be higher.
But supply 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 said.
Kennecotts 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 trader said.
"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, they said.
"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.