Copper Decouples From Base Metals & Oil Market Movements

Copper prices appear to be marching to the beat of their own drum. The industrial metal has decoupled itself from the market movements inherent in base metals as well as oil.

It's not a divergence that has been occurring in the near term, but one that's been brewing over the last few years. With the ongoing reliance on electricity, it might appear that copper should be moving almost in lockstep with other metals like lithium and cobalt. According to the CME Group, that hasn't been the case.

"Copper prices have charted their own course over the past two years, decoupling from base metals such as steel, battery metals lithium and cobalt, and ferrous metal aluminum," noted Erik Noland, chief economist and executive director of CME Group.

"While copper prices have risen by about 2% from the end of Q1 2022, steel prices are 26% lower over that period, aluminum prices are down 29% and the prices for cobalt and lithium used in EV batteries have tumbled by 64% and 77%, respectively (Figure 1)," he added.