As mentioned many times earlier, copper has always remained one of the luring commodities for the investors. But, recently, copper is showing a big drop, the drop has been for the third day consecutively and the prices have reached to the lowest level in more than seven months. Why did this drop occur? The experts believe that this drop must have been escalated by the manufacturing in the United States of America and China, which has been significantly lower than the forecast. USA and China are the biggest users of the commodity, so their sole impact on the commodity is higher.

Looking into the recent contract of copper for the three-month delivery, it can be observed that the prices have come down by 1.3 percent. As per the records in the London Metal Exchange, this lowered price has been lowest since 24^th August. Let’s look at it through the specs of quantitative measures, we do have an Index to better present our supportive arguments namely Institute for Supply Management’s factory Index. The index value has dropped to 51.3 recently from 54.2 which also suggest that the expansion is on with the commodity but at a decreasing rate. Now, either the economies have to maintain this index value or they will have to take strategies to increase it. The better one though is maintaining as it is the sustainable measure.

Interestingly, these days crude is also showing good enough relation with the copper. Crude had its second consecutive fall even though there were expectations that the prices will rise further. Contrasting to the reason why copper prices rose, crude prices took off owing to the inventory level which happens to be the highest in the recent 22 years or more. Prices of crude decreased in the market as the supplies significantly increased in the market which drove the crude prices low by almost a 0.3 percent. The expectations are that the demand will remain strong enough from the Asian buyers, so the prices may rise.

Note: This blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.