In the July 2011 issue of TED Magazine, Joe Salimando talked about some rather inconsistent data & viewpoints concerning the future price of copper. The article, entitled Copper’s Future: A Shaky Price?, presented excerpts from a rather complex and lengthy PDF about global asset allocations for commodities. Based on data presented in this document, Joe’s article offered some interesting thoughts for those of us in the electrical industry to consider:
- Have we achieved ‘peak copper’ prices?
- Production, as measured in recoverable copper ore yield grades, is down and inventories in the world’s major metals/futures exchanges are rising.
- Some experts contend that “copper is completely disconnected with the fundamentals which explained its price level in the past….”
- One source is betting that copper might fall to as low as $1.50 while plenty of other people think copper is headed north of $5.00 per pound.
What does all this mean? From the article it would seem that nobody really knows whether copper’s price will go up or down. The direction of trading in any commodity, equity or bond market is unclear and China’s use of copper to get around their central government’s limitation on loan-making may or may not be a factor.
What do you think is the best course for your business given the unpredictability in the copper futures market? This is an important topic to electrical distributors and manufacturers and we look forward to hearing from you. And thanks for subscribing to EVERYTHING’S CONNECTED.
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