A new report by Bloomberg points out the United States is currently paying the highest prices in the world right now, thanks to what is being called “tightness” in the market with increasing demand and supply still limited.
But, there are also signs that supply will begin to catch up with demand by the end of this year, and prices could potentially drop significantly.
The past 8 days of copper prices shows a chart with a line that climbed significantly. On July 22, copper sold at $4.22 a pound, which was the lowest point over the past 8 days. Steady increases led to a price of $4.34 just four days later, and then another spike that brought the price per pound to $4.40 by July 27. As of Friday morning, July 30, copper sat at $4.48 a pound.
Flooding in China, especially in an area where copper is shipped, is a main reason for the price increase since an already limited supply was reduced. That news comes just days after China announced that it would be releasing less from its copper reserves than first expected, which also created a price increase.
Looking at the price from a different perspective, the price per pound of copper is more than 20 cents lower than it was on June 1, when it was selling for more than $4.60 a pound.
But compared to the price one year ago, we are paying more than $1.40 more per pound than we did at the end of July 2020.
While prices remain high right now, analysts who responded to a recent Reuters poll believe the price of copper will drop significantly over the last five months of 2021. The analysts believe mining companies have accepted the demand and plan to increase output, while China will continue its effort to cap prices. Some analysts say they expect to see an 8%-10% decrease in price by the end of the year, with another predicting a more than $2,000 per metric tonne drop in copper prices before 2022.
Tagged with Biggest News, copper