What Influences the Selling Price of Copper?


Quick Answer

The selling price of copper is influenced largely by macroeconomics, which includes large-scale factors. For instance, one macroeconomic factor is China. It consumes 40 percent of all the world's copper, affecting the prices.

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Full Answer

China has an important influence on the prices of copper. Because it consumes so much copper, the price falls when its consumption declines. As of 2015, the Chinese economy has slowed because of a decline in factory output, retail sales and investments. This has lowered China's demand for copper, which in turn has created an oversupply and dropped the price. China is also working on reforming its economy, a situation that can also negatively impact the price of copper.

Another economical influence that affects the price of copper is the Indonesian taxes on exports. This law, enacted in 2009, makes it illegal to export unprocessed minerals such as copper as of 2014. The law has since been tweaked to allow for exports at for Freeport, but the export taxes are high from between 25 percent in 2014 to 60 percent by 2016. Because of the Indonesian situation, less copper is being mined in Indonesia, and less is being exported throughout the world, which drives up the prices.

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