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State of Copper

State of Copper

This time last year saw the price of copper skyrocket after the presidential election – mainly because of the expectation of a boom in infrastructure. This year, the red metal is in a state of flux as it bounces back and forth almost daily.

The market opened this morning a tick under $3.20 a pound (click on the chart at end of the article for up-to-the-minute pricing). As you can see in the following chart, copper hit a low of $2.48 per pound and a high of $3.27 in 2017. Copper did manage to end last week on a positive note, but will it gain any momentum as we close out the first month of the year?

“Copper market commentary is as positive right now as we’ve seen. Demand is growing throughout the world,” Richard Adkerson, Freeport’s CEO, said during the company’s 4Q17 earnings call. “Analysts and consultants who follow this business are expecting 2018 to be the first year of lower copper production after providing for disruptions than the prior year, first time that’s happened since 2011,” Adkerson stated. “This year there are a lot of labor contracts in Chile and Peru coming up and you can expect those negotiations to be challenging and it could be supported from a supply standpoint,” continued Adkerson. “All these things are challenges for the industry but they’re supportive of supply.” He also pointed to better-than-expected demand from China and growth in developed economies including Europe and the U.S.

We will not have to wait long to hear about the growth here in the States. That’s because President Donald Trump is expected to talk about the economy and his infrastructure plan in tonight’s State of the Union Address.

Expect to hear President Trump talk about Wall Street being on fire and immigration, among other hot topics looking back at his first year in office. We will keep an eye on the Markets in the days following tonight’s speech and let you know what impact it will have on the price of copper.

Further Reading
Seeking Alpha’s James Catlin takes an in-depth look at copper in 2018 in his article, Can the Copper Bull Keep Running?

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