Wednesday, March 18, 2015

Copper price ex-US

IKN's posted another copper price chart today, so I thought I'd add this in as food for thought:

The copper price indeed puked recently, but:

Only in US dollars. And I guess renminbi too, since that's pegged to US dollars.

Which means copper is cheaper for the US and China, so since they're now getting a deal you'd think they'd consume more. But it's still the same price it's been for the past 2 years in all other world currencies, so that means other countries are not benefiting from a "lower" price of copper.

Which I guess would be yet another way in which the US benefits from a strong dollar. And China too, if they decide to remain pegged and still want to gobble up loads of it as they modernize.

1 comment:

  1. This is largely irrelevant. China and the USa are 55% of all copper use in the world and China provides 70% of the YoY growth for the metal. As the Yuan/Renminbi has hardly moved against the USD in the past couple of years (esp compared to the really deval'd currencies) they're both paying the same amount for their copper.

    All this aside from the basic point: Copper's a world traded fungible commodity that (like it or not) is priced by everyone in USD. Nobody gives a flying fark what the price is in CAD, EUR, GBP or Paraguayan Guaranies. So in real terms you can scratch the word 'largely' from that 1st paragraph.