Copper prices over the past month continued to vary within a fairly stable range between $3.80 and $3.90 per pound on the Comex market (with a brief visit below $3.75 in early March). Cash prices settled at $3.85 per pound on Friday, Mar. 30. This is within the range where it's been pretty much since it made a jump of about 12 percent after the first of the year — ranging between $3.75 and $3.90 — and few copper watchers expect that to change much over the short term.
Copper prices responded negatively last month to reports of a decline in February home sales and concerns about softening demand from China, the metal's largest user. But there's a lot of underlying confidence that the U.S. economy overall, and construction in particular, will continue to work its way out of recession, and that China's housing market will continue to grow, though at a slightly slower rate than recently. That confidence, combined with a drop in copper stockpiles at the London Metals Exchange should continue to support the existing price range.
Looking closer at the recent drivers, sales of previously occupied homes in the U.S. fell slightly in February to 4.59 million from 4.63 million in January, the National Association of Realtors said. The two months still made up the best winter for sales of previously occupied homes in five years. This may be an effect of the mild winter weather pulling forward sales that would otherwise have been put off until March and April, as some real estate analysts suggest.
China, meanwhile, where about 40 percent of copper sold today ends up, has seen growing inventories of copper in Shanghai Metals Exchange warehouses. China may be slow in using up the inventory built at the end of last year because recent reports show slowing manufacturing and home construction in copper's biggest market, but seasonal growth in construction in the coming months is expected to work off some of that surplus and lead to growing demand this summer.
Driven by much the same demand picture, aluminum has continued to hover around the dollar mark, hitting just above $1.04 at the beginning of March, but falling back to range close around a dollar over the past couple of weeks.