For the Quarter Ending December 2022
In the final quarter of 2022, Copper Wire prices showcased a rising trend in the North American market owing to the rising interest rates and inflationary pressure. Copper prices fluctuated due to fears of a global recession as inflation in North America reached double digits in Q4. In October, the supply outlook remained bleak, as lower prices were insufficient to stimulate new manufacturing investment. Copper prices rose in the middle of the fourth quarter as investors proclaimed that central banks would slow the pace of interest rate hikes. Smelter transactions, on the other hand, increased in December as a result of replenishment requirements following supply issues, as well as slow discussions of annual term contracts, which increased demand for spot cargoes. The copper wire market remained uncertain amid global conflicts and the US midterm elections in the absence of any changes in the base metals that indicated a continuation of sideways movement. According to buyers, the physical trade has been extremely quiet and will remain so until the end of the year.
Copper Wire prices surged in the Chinese market in the fourth quarter of 2022 despite easing macroeconomic pressures, with solid support from both the supply and demand sides. In October, China's supply of copper concentrate was becoming increasingly scarce, and downstream enterprises were still concerned about high prices and weak terminal procurement, limiting the rise in copper prices even further. Consumers were becoming reluctant to support rising prices, and the supply-demand gap widened in the fourth quarter. The market's inventory remained low, driving up prices. Furthermore, the LME refused to impose delivery restrictions on Russian metal, lowering the risk of a market-position squeeze. Following the relaxation of China's pandemic control measures at the end of the fourth quarter, market participants became increasingly concerned about the demand outlook.
In the German market, the Copper Wire prices showcased an upward price trend in the fourth quarter of 2022 due to a combination of factors such as US dollar movement, China's zero-covid policies, persistent supply-side issues, and an uncertain macroeconomic outlook amid rising inflation and interest rates. Despite production issues in the middle of the fourth quarter, the threatened supply situation was not reflected in copper wire prices. As lower prices did not stimulate enough new production, the supply outlook remained bleak. Copper Wire prices were expected to be volatile if Western nations or the London Metal Exchange imposed restrictions on Russian-produced metal. The LME, on the other hand, did not impose a ban on Russian-origin products. Furthermore, global copper stocks fell to record lows, with current inventories only sufficient to meet global demand for a few days and shortage risks that did not reflect the tightness of the physical market.
For The Quarter Ending September 2022
Copper Wire prices witnessed an unprecedented surge in the third quarter of 2022 as the inquiries were stronger than expected from the end-users in the US market. According to market participants, the US rate hike could boost the dollar, but it retreated, making dollar-denominated metals cheaper for holders of other currencies, potentially increasing demand. Copper stocks in LME registered warehouses also supported prices and had canceled warrants (metal earmarked for delivery), which have been at 28% versus 18% at the start of August. Copper Wire prices rose due to the ripple effect of limited availability of raw material Copper Ingot in the face of falling dollar rates and recessionary fears.
During the third quarter of 2022, Copper Wire's price trends were falling due to the limited demand outlook. Even though the primary processing market had improved, manufacturers reported that end-user demand had not recovered. Buyers' claims to supply and demand were low due to the "loan suspension" and private real estate companies financing issues. Domestic and overseas orders in the home appliance sector were down, making performance difficult. The main copper-manufacturing areas were also disrupted, and output from overseas mines fell. Since August, refined domestic copper, high temperatures in many parts of the country, and growing concerns about sulfuric acid storage expansion have hampered electrolytic copper production. Domestic copper inventory remained high, and domestic mine supply remained limited.
In the European market, Copper Wire prices witnessed a rising trend amidst skyrocketing energy costs. As per market players, gliding energy costs had caused temporary smelter shutdowns in European regions and supported the rise in base metal prices. The increase in interest rates in advanced economies also weighed on commodity prices. However, given the low inventory levels in central warehouses, market participants expected that base metal prices were unlikely to fall any further in the near term. However, lower prices have been putting pressure on the margins of domestic base metal producers, and end-user industries have been the key beneficiaries. Because of the current year's price decline, base metal producers' margins have been squeezed. Furthermore, because of the rising coal price, players faced cost pressures when they purchased coal from the market.
For the Quarter Ending June 2022
Copper Wire prices in Chile fell during the second quarter of 2022. According to market participants, supply concerns have been exacerbated by dwindling Chilean production and conflict with local communities near copper mines in Peru. Droughts in Chile's Antofagasta and Atacama regions have forced manufacturers to rely on seawater and desalination plants. Furthermore, Chilean state-owned copper mining company Codelco announced the closure of its Ventanas smelter, which had been closed for maintenance and operational adjustments following a recent environmental incident that sickened dozens in the region. The Peruvian copper mine Las Bambas has been closed for the first two months of the second quarter of 2022, resulting in the layoff of approximately 3,000 miners. The suspension has disrupted Minerals and Metals Group's (MMG) supply of Copper raw materials and caused delays in delivering long-term Copper concentrate orders.
Copper Wire prices in China fell during the second quarter of 2022, owing to waning sentiments. Because of the ongoing domestic epidemic in April, market demand was low, logistics transportation was disrupted in many places, and downstream processing firms' operating rates were significantly lower. Investors were concerned about global stagflation in May, as US stocks fell and the US dollar index rose. Furthermore, the current domestic epidemic is weighing on copper consumption, and market sentiment is negative. However, the manufacturers witnessed multiple spot transactions of copper ores between smelters and mines with traded treatment charges in June. Certain smelters had a specific demand for spot clean Copper ore in Q3 2022, but the market was still short of pure Copper ore. Few Chinese and Japanese smelters are in the process of negotiating long-term orders for the middle of the year.
During Q2 2022, Copper Wire prices fell in the European market due to low demand and limited regional transactions, despite inflationary pressures and supply bottlenecks. According to market participants, rising US inflationary pressures have bolstered the case for the Federal Reserve's aggressive stimulus to rein in price coercion, raising fears of a recession. The administrators are becoming more hawkish, rattling risk assets across markets. Traders claim that recession fears are weighing on Copper Wire prices. Inflation and supply are still tight in the mid-second quarter. However, copper prices are falling as concerns about a slowdown in industrial movement across major economies coincide with a drop in Chinese demand. At the same time, the European Central Bank raised its inflation forecast at its June meeting and announced plans to begin a gradual and sustained rate hike.
For the Quarter Ending March 2022
In South America, the Copper wire prices showcased an increasing trend in Q1 2022 owing to the soaring prices of raw material Copper. Because of the rising price of Copper as raw material, Copper wire costs in South America witnessed an increasing trend in Q1 2022. The supply disruption caused by the dispute between Russia and Ukraine drives this price increase. During the conflict, supply concerns resurfaced when operations at Southern Copper's Cuajone mine in Peru were interrupted due to the residents blocking water and other critical supplies. According to local authorities, more than 18 percent of Peru's Copper production is reportedly disrupted. Various mines, notably the Cuajone Copper mine, Glencore's Antapaccay Copper mine, and MMR's Las Bambas Copper mine, have been impeded by Peruvian miners. Local miners believe they haven't benefited from the rising inflation in Copper prices.
In India, the Copper wire prices showcased an increasing trend in March owing to the soaring prices of raw material Copper. This surging in prices is primarily backed by the stretched supply chain provoked by the geopolitical uncertainties between Russia and Ukraine. Additionally, the sanctions imposed by the western nations on Russia have two-folded the impact on the global supply chain of Copper, as Russia is a significant producer of Copper. Additionally, India imports Copper primarily from Peru and Chile. However, the Peruvian miners have hampered the mining activities of various mines. Local miners assert that they haven't received a payoff from the increasing prices of Copper. Market players expect the Copper wire prices to come under pressure as the supply growth outstrips demand as output from new projects hits the market.
In Europe, Copper Wire prices witnessed a soaring trend during the first quarter of 2022 due to the rising geopolitical uncertainties and increasing costs of raw materials. This ascending trend is also backed by the supply chain disruptions caused by the Russia-Ukraine war. However, the high prices of Crude oil, coal, and power in the regional market further heightened the inflationary pressure amid rising raw material prices forcing the market player to embark more aggressively. During the conflict, robust demand for Copper amidst the lower inventory levels further provoked the supply concerns to resurface. Moreover, the sanction imposed by Australia on Russia came into force with increased supply putting additional pressure on the market and the already stretched supply chain.