What's going on?

The price of copper, a key ingredient in products around the world (like electric cars), jumped again on Monday � hitting its highest level in more than three years!

What does this mean?

Copper isn�t the only industrial metal on a roll: nickel and iron ore (key ingredients in steel) are also at, or near, multi-year highs. China is seemingly responsible for this strong performance: for one, Chinese manufacturing continues to expand, fueling demand for these metals. The most immediate impact appears to be coming from new Chinese environmental regulations that have forced many small producers in the country to close down or reduce their metal production � this has limited the supply of industrial metals and helped push their prices up.


Yet another factor is the relatively weak US dollar (it has fallen almost 8% versus the Chinese yuan this year): as the dollar goes down, it becomes cheaper for China (and other countries) to buy commodities which are denominated in dollars, thus pushing up their prices.

Why should I care?

For markets: Mining stocks are riding the China wave.

The mining companies that produce these metals are having a great year: the stock prices of two of the world�s biggest copper miners, Glencore and Freeport-McMoRan, have risen 30% over the past three months. Also, a collection of mining stocks (compiled by Bloomberg) is at its highest level in three years. Whether the mining revival will continue to benefit investors is unclear � metals prices have jumped a lot in a short amount of time, making them vulnerable to, at least, a partial reversal. But, for now, it�s a red hot sector.


For you personally: Higher metals prices should feed through into higher prices of other things.

Industrial metals are, of course, used in lots of the goods that people and companies buy (including wiring in homes and auto parts). As the prices of these metals rise, it becomes more expensive to manufacture the goods � and those costs are typically passed on to the customer (e.g. you!).