Copper Price Extends Drop to Lowest Since 2009Joe Deaux and Agnieszka de Sousa
Copper fell to the lowest in more than five years on speculation that cheaper energy costs will encourage mining companies to increase production.
Crude oil in New York traded below $45 a barrel today and has plunged about 50 percent in the past year as the U.S. pumped at the fastest rate in more than three decades and OPEC resisted calls to cut production. The decline will help cut costs to produce and transport metals, according to Natixis SA.
“OPEC is sticking to the plan of continued production, which is driving oil lower,” Mike Dragosits, a senior commodity strategist at TD Securities in Toronto, said in a telephone interview. “That’s seemingly driving the cost of production lower for copper, which was already seen as being in surplus.”
Copper for delivery in three months fell 2.6 percent to settle at $5,860 a metric ton ($2.66 a pound) at 5:51 p.m. on the London Metal Exchange, the biggest drop since Nov. 28. The metal reached $5,774.75, the lowest since August 2009.
Aluminum, lead, nickel, tin and zinc also declined in London.
In New York, copper futures for March delivery lost 3 percent to $2.644 a pound on the Comex, falling for a third straight session.
Supply concerns outweighed signs of increased demand in China, the world’s biggest metals user. The country’s inbound shipments of unwrought copper and products in 2014 rose 7.4 percent to a record 4.83 million metric tons, according to data released by the General Administration of Customs today. Imports in December were at 420,000 tons, unchanged from November.