Copper Futures Crash Below $2 For First Time Since 2009
Dr. Copper is sick. For the first time since May 2009, Copper futures prices traded with a $1 handle this morning ($1.99) as Nomura analysts warn the commodity is likely to see more downside risk over the medium term as the market is expected to remain in surplus through the end of the decade.
As Bloomberg adds, Nomura's Patrick Jones warns:
Copper demand could see 2m-3m mt/yr “demand destruction” led by substitution of the metal by using aluminum and other materials.
Expects substitution in autos, air conditioning, power distribution cabling rising over next several yrs
Despite RBC noting yesterday, copper price should now be reasonably well supported at $2.08/lb vs historic cost support at 90th percentile of cash cost curve (at $1.98/lb), though if market remains in surplus, further downside risk exists
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Is Dr. Copper that guy who fisted Daniella Rush in that one movie?
I think the Aussia is going into the .6700-.6800 handle.
And cash costs are at 2 dollar. Will buy some copper next year.
Forget spot. This is about the recreation of cheap mines and the reconfiguration of ownership in same. First drive out the investors. That's the long game.
What PMs are sort of by-products of copper refinement? Doesn't this mean we won't be shipping as much to the East and therefore they might be looking elsewhere for more? Guys, Knox is empty and even the rats have been killed for their stomach gold particles.
"What PMs are sort of by-products of copper refinement?"
I think I get your drift there. But, that raises two questions in my mind now.
1 - If copper demand tanks and thus production lowers to remove excess inventory (in an attempt to drive price), what will happen to the availability of those "by-products" and their pricing?
2 - How will this affect the miner shares - and which way do we go - long or short?
Dont worry its not like we are a world dependent on electronics/electricity and thus declining usage of copper would be a doomsday forcast...