Author: Paul Ploumis
06 Jan 2015 Last updated at 03:09:06 GMT
LONDON (Scrap Monster): The most hurt among these casualties was copper, the metal which is mainly being used to produce copper wires and the electrical circuits. According to the Wall Street Journal dollar Index, the value of the US Dollar has been raised to the highest peak after the currency’s value in the year of 2003. The spot price of copper has been noted as 6,308 dollars per tonne, which just a little hike as 3 dollars in the last month.As copper is a US dollar denominated commodity, the high value of dollars withholds the demand of the commodity, as the value of dollars increases the commodity becomes more and more expensive for other currencies.
Even so, we cannot completely blame the increase in the value of the dollar as the reason for the decline of copper metal. China is being held as responsible for more than half of the consumption of copper, and the investors in the country are, mainly focusing on the economic growth, and also in the production of car and electric tools , around the world’s most popular nation. There is news as well as rumors that the manufacturing development in the country has slumped almost 16 percent, which declined the possibility of copper to shine through.
The main distress of the investors in copper is that, the metal might be facing a surplus soon and weaker global demand for copper might clash up with the oversupply of the commodity. When the interplay between the supply and demand is taken into consideration, the analysts fear that, the commodity still has more bad days waiting. Most of the analysts expect that the price of the commodity will remain nearly flat for the coming weeks. According to the forecasts collected from banks and experts the metal will have an an average price of $6,800 a tonne this year, $6,625 a tonne in 2016 and $6,600 a tonne in 2017. The expected surplus for this year is 10,000 tonnes and the surplus within both copper concentrates and also refined copper, will get worse in the coming two years. At the same time the demand from China, and Europem, which contributes to over two third of the world’s copper demand, seems to be dull.
