Copper Takes a Dive

Pricing for copper, which has been buoyant for more than a year based partially on growing demand from China, has taken a quick hit in mid-week trading.

Reports from BBC News portray drops in copper pricing on the LME (London Metal Exchange) while Bloomberg and other news agencies have noted a similar fall-off in Comex copper pricing.

A 15-cent drop in December copper delivery prices on the Comex exchange equated to an 11 percent decline in value for the red metal.

LME pricing reported a similar drop, as both markets reacted to a 21 percent copper consumption drop in China for the month of July.

The drop came after a 15-month run-up had brought Comex copper pricing to as much as $1.46 per pound. A trader quoted by Bloomberg noted that speculators were waiting for some sign of “a hiccup” from China.

An economist from Bloomberg offered his opinion that speculators were behind the price plunge, as the July figure may have caused them to rush to change their formerly bullish positions. Copper prices on the Shanghai Exchange were also reportedly falling.

It remains to be seen whether the one-day drop signals a medium- or long-term trend, as many market fundamentals still point to copper demand outpacing new supply.