Despite falling prices, which have pushed as much as a tenth of the world’s copper miners into the negative, the drop has not been severe enough to trigger supply cuts, Reuters reports. [ETF Chart of the Day: Copper Call]
Robert Edwards, managing consultant for mining costs at consultancy CRU, argues that miners may cut supply once copper prices fall to a more unsustainable $5,000 per ton, which would make a quarter of the world’s producers unprofitable.
Moreover, copper prices could see further pain ahead of the Chinese Lunar New Year in February, a week-long holiday that would idle many factories and manufacturers across Asia.
iPath Dow Jones-UBS Copper Subindex Total Return ETN
For more information on the copper market, visit our copper category.
Max Chen contributed to this article.