Remember during the negotiations over tariffs with China a few years ago when every time there was announcement that an agreement was close, the major averages on Wall Street jumped. Hours later, another announcement would say a deal would never happen, and the averages dropped like a metal safe onto concrete.
That’s a little like what is happening right now with the price of copper. A little negative news about the U.S. economy, and the price jumps. A little hint of negative news about the Chinese economy, and the price drops again.
And then out of nowhere comes a price spike on Friday morning, September 10.
And that’s what happened this week.
After a somewhat quiet first few days of September, the price of copper settled at $4.33 a pound by the end of trading last Friday, September 3.
Then came the reaction to the news that hiring slowed in August, falling far short of expectations with the smaller number of added jobs in the past seven months. That led to a cascade of events, from speculation that the Fed would not scale back monetary support for the economy before 2022 to the potential value of the dollar decreasing.
The end result for copper: a quick, but not long-lasting, increase in price.
Because by Monday, September 5, word had leaked that China’s copper imports had dropped to its lowest level since June of 2019, and is now down 41% compared to imports in August of 2020. Less demand means a lower price, and at one point copper’s price had dipped to $4.25 a pound before settling at $4.28 a pound on Tuesday, September 7.
Then came more news out of China and Europe: the dollar was about to reach its high point for the week. Couple that with the report that factory activity had dropped, and the price of copper fell to its low point of the week, hitting $4.20 a pound on Wednesday, September 8 before settling for the day at $4.23 a pound.
After a day when the price of copper dipped to $4.21 a pound and then rebounded to $4.31 a pound, Thursday, September 9th’s trading ended near the middle, with the price landing at $4.28.
And then on Friday morning, September 10, we wake up to another price spike, and now copper sits at $4.38 a pound, five cents higher than it was a week ago.
The price is currently about 9 cents higher per pound than it was one month ago on August 10, and about ten cents higher than six months ago on March 10.
With the Biden Administration’s announcement for a goal of 40% of U.S. electricity provided by solar by 2035, the demand for copper could remain strong. Analysts believe that will keep copper prices high for at least the near future.
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