Copper is one of the major commodities whose price is connected to economic recovery. Copper was on the rise in October and November, but the outlook for the metal looks uncertain through the rest of the year.
Catherine Virga, an analyst at CPM Group, says labor negotiations at mines in Argentina and Chile, up for expiration on Nov. 30 and Dec. 31, respectively, could send prices in either direction. “I wouldn’t be surprised to see copper get to $7,000 if there were strikes at Codelco [a copper mine in Chile] in December,” she says. “The supply side dynamics are strong in the market, with the potential strikes and other supply disruptions,” she says, adding that the dollar is a wild card for copper. “Any strength in the dollar would be bearish for copper prices and we’re at such low levels now.”
David Abramson, managing editor of the commodity and energy service at BCA Research, calls the outlook for copper “unusually uncertain.” “The speculators have been very short copper and now they’ve been squeezed out of those short positions, so a forecast of three months out is a very tough thing [to predict]. Six to nine months out, where we’re going to get a re-test in the highs, over $8,000 a ton,” he says, adding that demand outside of China is one of the key issues for copper.