Dr. Ed’s
Economic
Indicators

COPPER

Release Date: Daily
Release Coverage: Month-End
Released By: N/A
Official Release: http://www.bloomberg.com/markets/commodities/cfutures.html

This index tracks the price per pound of copper. Copper is considered to be one of the most used metals in the country. It can be obtained through mining or collection of scrap metals. There are many industries that utilize copper, especially those involved with homebuilding (i.e., electrical and plumbing). According to the Copper Development Association, building construction continues to be the largest end-use market for copper products, accounting for more than two-fifths of total U.S. consumption.

WHAT DR. ED SAYS:

It is vital for a bank that deals with mining-based businesses. However, copper prices do not only affect those strictly involved in the copper processing value chain. Unlike gold, copper is not a metal that is tied to stability/volatility of the market, but more heavily tied to supply and demand. This commodity can serve to help monitor increases in prices to homebuilders which may hinder certain development opportunities in your area. Along with homebuilders, you will see electronic producers having margins squeezed or transferring the commodity prices to the consumer. As commodity prices rise, inflationary pressures emerge and, generally, commodity prices should rise with inflation, barring any sort of supply shortage.

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