Metal Price Factors Metal pricing is directly related to supply and demand drivers, which are impacted by economic conditions, political and social situations, the price of competitive alternatives and even seasonal swings.
This information on factors that impact common metal types can help you understand why and when prices fluctuate, and help you better manage your business.
Factors Affecting Copper Prices Copper is commonly used in housing, automotive and electrical industries. Therefore, demand for copper is impacted by the general condition of the economy. When the economy is strong and consumers are building houses and buying cars, copper is in high demand and prices rise. Conversely, during weak economic conditions, demand and prices for copper move lower.
If prices for copper get too high, other alternatives – like steel, aluminum, plastic, fiber optics – become more attractive to manufacturers, which helps limit price increases during peak demand periods.
From time to time, major disruptions in copper production can affect supply. These disruptions can be caused by periods of labor strife at copper-producing or international transport companies, or political turmoil in copper-producing countries. When these disruptions occur, the price of copper can fluctuate accordingly.
Copper prices are also affected by seasonal manufacturing cycles. Housing and automotive production, for example, is strongest in Spring and Summer, so demand for copper tends to increase in late Winter/early Spring as manufacturers build their supplies in advance of peak production.
Factors Affecting Aluminum Prices Aluminum pricing also responds to supply and demand drivers. Compared to copper, however, aluminum production is more widely dispersed, and a broader base of manufactures use it, which means that both supply and demand for aluminum are less impacted by political, social or seasonal factors. Therefore, the price of aluminum tends to be less volatile and more directly related to economic conditions.