Current situation:
- The Producer Price Index for copper tube and fittings were up 5.3% month-over-month (up 5.2% in the last update) and was up 7.6% year-over-year (down 3.7% Y/Y last month).
- Copper closed Sept. 18, at $3.05 ($2.97 last month).
Key factors that could affect supply or price:
- Prices: Currently trading at $3.04 lb. The average price was $2.95 over the past 30 days, the highest monthly average since June 2018.
- So much for what the experts/analysts were saying two weeks ago, when some were taking a cautionary tone as they felt a correction may be coming.
- Today, the industry is dealing with historic low inventories (2005), dropping over 70% just since May, and extremely strong demand from China. Mining operations in South America, and in particular Chile, are struggling to keep up with demand while dealing with the effects of COVID on manpower at their operations, as are mills. The large Kennecott mine in Utah is under Force Majeure and is having a hard time supplying material.
- On the finished product perspective, there is an expectation of higher prices coming and lead-times being extended out 2 -3 weeks and more on certain sizes. Expect inventories to be tight over the next 45 - 60 days as they have been over the past 8 weeks.
