For the Quarter Ending September 2022
North America
In the North American market, Copper Plate prices witnessed an up-swinging trend in the third quarter of 2022. According to market participants, the LME copper price rose weekly, approaching $8,000 per tonne. However, the Federal Reserve's hawkish stance hampered the demand outlook in August, outweighing supply risks. With Chile's Codelco becoming the latest major producer to cut output guidance, the worsening sentiment on Copper Plate demand took precedence over further signs that supply is under threat. Copper Plate prices have been supported by ongoing supply bottlenecks at several mines across the United States and Chinese authorities cutting interest rates. In conjunction with rising European energy prices, the US Inflation Reduction Act has prompted several investors and manufacturers to invest in renewables as soon as possible before energy prices skyrocket, thereby increasing copper demand. Therefore, the discussions of Copper Plate (C 11000) prices for Ex Alabama (USA) settled at USD 15130/MT.
Asia Pacific
Copper Plate prices fell by more than 10% during the third quarter of 2022 due to falling raw material costs. According to market participants, even though input costs are declining, inflationary concerns remain firm, and the manufacturers implemented cost-cutting measures to help the margin rise. According to market participants, the benefits of softening raw materials may be visible in the coming quarters. Copper prices rose in August after data showed that inflation in the United States was lower than expected, raising hopes that interest rate hikes would be less aggressive and alleviating fears of a recession. Copper prices rose as investors worried that stoppages caused by high energy prices or other disruptions would lead to shortages. However, because they are essentially refiners who import copper concentrates due to limited access to mines, the profitability of Indian copper players is less dependent on metal prices. As a ripple effect, the Copper Plate (C 12000) prices for Ex Qingdao settled at USD 7905/MT.
Europe
Copper Plate prices in Germany increased in the third quarter of 2022. According to the Federal Statistical Office, inflation in Germany rose again in August after falling slightly in June and July due to short-term government programs to reduce consumer burdens in the transportation sector. The European Central Bank has raised interest rates to combat the eurozone crisis. If the price remains below the marginal cost for an extended period, some producers may be forced to close their plants. However, as investors became more cautious, global equities fell, and the US dollar rose, putting pressure on dollar-priced metals by making them more expensive to buyers using other currencies. Funds have been amassing short positions in anticipation of a recession. Some investors bought put options, which give the holder the right to sell copper at a specific price on a particular date. Thus, the Copper Plate (C 11000) prices for FOB Bremen (Germany) dropped to USD 13360/MT.
For the Quarter Ending June 2022
South America
In Chile, the Copper Plate prices witnessed a declining trade during the second quarter of 2022. According to market participants, declining Chilean production and conflict with local communities near copper mines in Peru have exacerbated supply concerns. Due to droughts in Chile's Antofagasta and Atacama regions, manufacturers are forced to use seawater and desalination plants. Exchange warehouses, where supplies of copper metal are limited, provide some relief. Furthermore, Codelco, a Chilean state-owned copper mining company, announced that it would close its Ventanas smelter, which had been closed for maintenance and operational adjustments following a recent environmental incident that sickened dozens in the region. Meanwhile, China's strict "zero-covid" policy of constantly monitoring, testing, and isolating its citizens to halt the spread of the coronavirus has harmed the country's economy and manufacturing sector.
Asia Pacific
In the Chinese market, the Copper Plate prices witnessed declining sentiments during the second quarter of 2022. Due to the ongoing domestic epidemic in April, market demand was weak, disrupted logistics transportation was in many places, and downstream processing firms' operating rates were significantly lower. In May, US stocks fell, the US dollar index rose, and investors were concerned about global stagflation. Furthermore, the current domestic epidemic continues to drag down copper consumption, and market sentiment is pessimistic. The low global copper inventory has weakened copper prices' support. Fundamentally, concentrate supply is adequate, spot processing costs are stable, and demand is muted.
Europe
In the European market, the Copper Plate prices declined due to the muted demand and limited transactions in the regional market amidst the inflationary pressure and supply snarls. As per market players, the elevated US inflationary pressure has bolstered the case for the Federal Reserve's aggressive stimulus to rein in price coercion, heightening concerns of a recession. The administrators are striking an increasingly hawkish tone, rattling risk assets across markets. Traders cite that recession worries pummel the prices. In the mid-second quarter, inflation and supplies are still tight. But Copper prices are plummeting as worries about a downshift in industrial movement across major economies dovetail with slumping demand in China. At the same time, the European Central Bank lifted its inflation forecast at the June meeting and intended to start a gradual and sustained interest rate hike. The hawkish signs put pressure on the assets.
For the Quarter Ending March 2022
South America
In South America, the Copper Plate witnessed an inclining trend owing to increased demand from the downstream sector amidst the Russia-Ukraine war. Additionally, Peru's government has put ambiguous taxes on the mining activities in the country since 2021, drawing fierce protest from the local miners. According to domestic players, Peru's current benefit from mining taxes is nearly 50%. Meanwhile, it is approximately 41% in Chile. Peru's administration is still focused on surplus profits. Despite fundamental objectives, domestic market players in Peru are less ambitious about the new push in the market. Additionally, market players expect Copper Plate prices to showcase a marginal increase in trend due to inventory depletion and supply shortage. However, the demand for Copper is expected to be stable this year.
Asia Pacific
Copper Plate prices in Asia-Pacific increased in the first quarter of 2022. In the context of the ongoing Russia-Ukraine conflict, raised LME cash prices essentially support this inflationary expansion. With a weekly marginal gain of 0.80 percent, LME cash prices settled at $10,400/tonne. Hindalco, India's largest copper miner, had its production fall by roughly 12% in February compared to January. Hindalco's annual production has also reduced by about 5.14 percent. Furthermore, in China, a more brutal COVID control policy in Shanghai briefly hampered Copper's industrial activity and the supply chain, which further provoked tight supplies and sliding inventories. As a result, Chinese copper scrap prices increased by 3.4 percent per metric tonne. Across the middle of this, Peru's government has implemented ambiguous mining taxes in the country. Despite primary targets, the domestic market players in Peru are less ambitious about the new push in the market. As a ripple effect, the Copper Plate (C110/B5) prices for Ex Mumbai (India) settled at INR 834500/MT.
Europe
Copper Plate prices in Europe remained high in the first quarter of 2022, with the Copper Monthly Metals Index (MMI) rising 3.5 percent month over month and remaining in a tight trading range. A global supply constraint caused by the extended hostilities between Russia and Ukraine resulted in a two-fold impact on the Copper market. Furthermore, substantial price swings encouraged industrial clients to purchase opportunities owing to the unanticipated danger of storing inventories. On the other hand, traders utilized this range to scalp prices, which means they took short positions to profit from Copper's price volatility. As a result, industrial buyers face risk and are reluctant about whether to hedge or cut back on their acquisitions.
