The 8% fall in copper prices this month puts the metal price on a path eerily similar to that of the oil price
John Robertson
PortfolioDirect
The 8% fall in copper prices this month puts the metal price on a path eerily similar to that of the oil price. Both commodities have experienced unprecedented price rises of a similar order of magnitude through the most recent cycle. There is little history of trading outside this timeframe to gauge how prices might behave once they began to fall. Ultimately, the only guidepost to how low prices might fall is the possibility of production being cut at some lower level. Since well before 2008, copper prices have been above what had been needed to keep production intact. The Chilean Copper Commission has estimated that average copper cathode production costs globally in 2012, for example, were US$2.15 per pound. The most expensive production - at $2.66 per pound - was in Africa. Today's copper price remains sufficiently high to sustain virtually all the existing production.
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John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business strategist and investment market professional for over 30 years after starting his career as a Commonwealth Treasury economist in Canberra. Since being Australia's top-rated commodities analyst and chief economist at one of Australia' leading stockbroking firms, he has advised companies across the mining, consumer products, IT and biotech sectors on their equity market relations. He leads the firm's investment evaluation and security structuring activities on behalf of the Australian Small Scale Offerings Board (ASSOB), the world's first equity 'crowdfunding' investment platform. John Robertson discusses the interaction of mining and investment markets in his weekly 'From the Capital' column in Mining Journal.
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John Robertson
PortfolioDirect
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
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No areas of expertise
John Robertson
PortfolioDirect
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
Expertise
No areas of expertise
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