For the Quarter Ending December 2022
In the final quarter of 2022, the Copper Plate prices showcased a rising trend in the US market, despite rising interest rates and a mixed downstream demand outlook. Copper prices fluctuated due to fears of a global recession as inflation in North America reached double digits in Q4. The supply outlook remained bleak in October, as lower prices were insufficient to spur new manufacturing investment. According to buyers, copper prices rose in mid-Q4 alongside global stock markets as investors believed that central banks would slow the pace of interest rate rises, and the dollar fell, making dollar-priced commodities less expensive for buyers using other currencies. In the absence of any changes in the base metals that indicated a continuation of sideways movement, the copper plate market remained uncertain amid global conflicts and the US midterm elections. Buyers reported that the physical trade had been extremely quiet and would continue to be so until the end of the year. As a result, domestic buyers chose to adopt a conservative approach. Thus, the Copper Plate (C 11000) discussions for Ex Alabama (USA) settled at USD 12383/MT.
Copper Plate prices climbed in an upward direction in the Chinese market in the fourth quarter of 2022, despite easing current macroeconomic pressures, with solid support from both the supply and demand sides. Copper concentrate supply in China increased insufficiently in October, and downstream enterprises feared higher prices, limiting the rise in copper prices. The possibility that the LME would ban Russian metals boosted copper prices. The epidemic reduced the operating rates in both North and South China. Consumers were becoming incompetent to support rising prices, and the supply-demand gap widened in mid-Q4. The new production capacity was put into service, but the supply pressure delivery rate was slower due to maintenance and equipment transformation disruptions. After China's pandemic control measures were relaxed at the end of the fourth quarter, market participants became increasingly concerned about the demand outlook. Imported and domestic copper arrivals were limited, and downstream firms increased their purchases in December. The New Year was approaching, and an increase in the number of COVID-19-infected patients had curtailed downstream companies' operating rates in half, suppressing demand. As a result, the Ex Qingdao (China) Copper Plate (C 12000) prices are fixed at USD 7733/MT.
In the European market, Copper Plate prices increased in the fourth quarter of 2022, and the currency strengthened amidst hawkish comments from US Federal Reserve officials. Despite production difficulties in mid-Q4, the threatened supply situation was not reflected in Copper Plate prices. The supply outlook remained bleak because the low prices did not sufficiently stimulate new production. With the exception of a few large mines in Chile and Peru, the market experienced little expansion. Copper Plate prices were expected to be volatile if Western nations or the London Metal Exchange imposed restrictions on Russian-produced metal. However, the LME did not impose a ban on Russian-origin products. According to market participants, a stronger dollar increased the cost of the greenback-priced metal for buyers holding other currencies. Furthermore, global copper stocks fell to record lows, with current inventories only enough to meet global demand for a few days and shortage risks that did not reflect the physical market's tightness. A series of planned and unplanned smelter shutdowns in South America and Europe have exacerbated the impact of increased supply on treatment charges this year. Thus, Copper Plate (CW008A-1 mm) prices for Ex Drolshagen settled at USD 12653/MT.
For the Quarter Ending September 2022
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.
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.
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
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.
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.
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
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.
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.
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.