Copper Volatility Surges as Price Tumbles Near 5-Year LowJoe Deaux
Copper volatility rose to the highest since 2013 as futures traded near a five-year low.
The metal’s 60-day historical volatility was near 23.4 this week, the highest since July 2013. Futures on Jan. 26 reached the lowest since mid-2009.
Prices are down 13 percent this year, the biggest loss among metals tracked by the Bloomberg Commodity Index. Cooling industrial growth in China, the world’s biggest consumer, is spurring concern that demand will ebb. A jump in stockpiles tracked by the London Metal Exchange has also driven prices lower.
“Stocks have been rising, Chinese local premiums are very soft,” Edward Meir, an analyst at INTL FCStone in New York, said in a telephone interview. “It’s a well-supplied picture. Combine all these things and it shows you how bearish the outlook is for copper.”
Copper futures for March delivery dropped 1.1 percent to settle at $2.4515 a pound at 1:15 p.m. on the Comex in New York. Prices touched $2.419 on Jan. 26, the lowest since July 2009.
Inventories monitored by the LME rose 1.1 percent to 247,450 tons, gaining for the 13th straight day. The supplies are up 40 percent this month, heading for the biggest gain since January 2009.
In London, copper for delivery in three months dropped 1.6 percent to $5,395 a metric ton ($2.45 a pound). Also on the LME, aluminum, zinc, nickel, lead and tin declined.