Are copper prices going up or down? Speculative investors in the copper market expect a slowdown in global economic growth, which argues in favor of lower prices for this base metal, despite their recent recovery. Copper is considered an indicator of the state of the global economy.

According to recent data, the number of short positions of investment managers in copper on the LME and the COMEX exceeds the number of long positions.

Prices by the pound

Three-month copper futures on the LME were trading at around $8,160 a ton at the time of writing, up 18% from the 20-month low reached on July 15.

Meanwhile, copper prices have fallen 25% since hitting a record high of $10,845 a ton in March amid a slowdown in economic growth in China, the metal’s biggest consumer. Also, prices are under pressure from an active increase in interest rates, which could lead to a global recession.

Many speculative investors are using options on copper at the LME, betting on lower prices. Investors are taking positions on December LME copper put options with strike prices of $7,000, $6,000 and $5,000, according to LME data released Wednesday.

Some of the strike prices coincide with the marginal cost of producing copper. Investors often use them to understand how much prices might fall in a negative scenario.

The direct costs of producing copper at the 10 percent of mines with the highest costs are $5,085 per ton. Morgan Stanley noted. Including capital costs – necessary to maintain current levels of production – to sell a ton of copper goes to $6,000-6,400 per ton, the bank added.

If the copper price stays below marginal production costs for a long time, some mining companies may shut down.

Earlier we reported that Russia has been named the winner in the oil standoff.