Commentary by Ian Scarlett, Head of Metals for Luvata:
The cash price for copper was $6777.50 on Friday June 20, 2014.
A year ago, we asked poll participants to predict the price of copper for June 20, 2014 and 48% of people thought the price would be higher... 19% of people were correct... and 33% of people thought it would be lower. So actually more people either got it right or thought it would be lower than those who thought it would be higher.
So the move lower has been more in line with people's expectations than not. Interesting.
Why has the price of copper fallen in the past year?
The news in the past year from China, the country with the largest consumption of copper in the world, has been uncertain and in some cases negative.
There have been concerns over levels of consumption and if there has been a slow down, questions of bad debt, questions over credit availability, and more recently over the document reliability against physical copper.
On paper we have moved from a deficit market a year ago to one that is more in balance, or even now in surplus. And that is the projection by most analysts for the coming couple of years. The surplus may have come a little slower than expected due to smelter closures, accidents or natural disasters, but slowly and surely the deficit is behind us.
The investment community has taken a more negative view on the performance and investment returns offered from copper. Therefore the past year has seen investors moving positions to a more neutral or negative stance.
Whilst there is recognition that economically the world is better than a year ago, it has been a period of continued uncertainty and fragile confidence in the economic outlook from the Americas, through Europe and Asia.
I wonder how many people, who accurately guessed, saw this coming? I didn't. That's probably why I'm not much of a gambler.