Let’s explicitly talk about why copper prices are falling and where
the end might be. To go into detail on it you first have to go back
15-20 years ago to see where the copper prices were in comparison to
everything.
My Dad once infamously said, “You know something is wrong when a
pound of tomatoes costs more then a pound of copper. You can just plant
copper seeds and grow more copper.” How true of a statement that that
really is. How can you grow the copper supply without further mining….OR
enhanced recycling. The latter of those two points is what I want to
talk about now.
Recycling has been around for thousands of years and you can find
signs from World War I and II talking about how people should donate or
“recycle” their copper in order to help build tanks, bullets, and other
military type of equipment. Once that started…things just took off from
there. Let’s fast forward to 1990 and look at the last 25 years of
copper prices. In 1990 the price of copper was trading around $1 per lb
and had been in that range for a few years. Bare Bright prices were very
low as was all copper bearing materials (or CBM for short), and the
market was plugging along like that until 1999 when the copper prices
fell to $0.60 cents a pound or so and people were asking why copper
prices are falling like this and when they will rebound.
The answer to the rebound was around 2004-2005 when the market
increased so suddenly that prices went from $0.60 per lb up to $3 in a
matter of 2 years. That means that the price of copper increased 5 fold
in a two year period. Now some people say that this was long overdue and
it was a longtime correction of the market, but other say that it was a
fluke and were not very optimistic.
Copper used to be simply a commodity, nothing more, it was traded,
but was being traded by specialty commodity brokers and traders and was
not looked at as anything more then corn, flour, or other commodities.
It wasn’t until the 2005-2006 when copper started to be traded similarly
to a stock and was really taking off in a very different way.
Copper has become a “hot topic,” and has been talked about on news
channels, major newspapers, and throughout the scrap metal world.
Millions of customers across the world have become “scrappers,” and many
rely on copper and other scrap prices being high so they will be able
to make extra money from demolitions, town clean-outs, or other misc.
events.
Let’s fast forward to 2015 and ask why copper prices are falling this
time around. Copper has become a big topic of conversation and when the
copper prices fall the way that they have people ask many questions.
With the overall world outlook dipping down and growth of undeveloped
countries slowing down this is one of the many reasons that the price of
copper has dropped. With countries like China and India having a large
slowdown with their markets it is tough to gauge when the markets will
recover and if they will anytime soon.
With oil prices at lows that is one big indication that copper prices
will not be recovering anytime soon and many people are expecting the
market to drop more in 2015. Stay tuned to more updates from the iScrap
App and we will be able to make sure to share all of the latest
information that we can on why copper prices are falling and anything
else scrap metal related.
