An interesting thought about copper. Why is the price rising, while economic activity is subdued?
There are 2 main things causing the price rally
* lack of supply in the scrap market forcing copper users to turn to global exchanges - bearish.
* no-where to store the by-product of refined copper (sulphuric acid) which is difficult to store/dangerous to transport. Usually chem companies and fertilizers buy the by-product but they're demand levels have plummeted because they're not selling as much product - so storage tanks are full and some copper mines have to shut down simply because they've run out of space to store sulphuric acid.
Normally copper is seen as a driver for economic growth and higher prices mean a better economy. This time, it’s the lack of demand driving prices up.
Oh irony…
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There are 2 main things causing the price rally
* lack of supply in the scrap market forcing copper users to turn to global exchanges - bearish.
* no-where to store the by-product of refined copper (sulphuric acid) which is difficult to store/dangerous to transport. Usually chem companies and fertilizers buy the by-product but they're demand levels have plummeted because they're not selling as much product - so storage tanks are full and some copper mines have to shut down simply because they've run out of space to store sulphuric acid.
Normally copper is seen as a driver for economic growth and higher prices mean a better economy. This time, it’s the lack of demand driving prices up.
Oh irony…
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