A copper-bottomed bellwether

A bellwether is an indicator of a trend: a single measure that tells you a lot about a bigger or more complex scenario. For example, polling in a swing state of the US may predict how a general election may turn out – Lincoln County, Missouri is traditionally seen as such a bellwether indicator having almost always predicted the general election result. The term comes from old English; shepherds would only need to put a bell on one sheep (usually a neutered ram or “wether” in old English) to tell them where the whole flock was.

The price of copper is seen as a bellwether for manufacturing. Last week it reached a 2-year low, something that has been put down to a deterioration in manufacturing as a result of the USA-China trade war. Copper is a better indicator than most metals as it is heavily used in construction and in the production of white goods.

However, the price of copper may also be a bellwether of even greater concern. Copper is crucial to the move to a low-carbon economy: it is required for the batteries in electric vehicles, and a large wind-turbine contains three tonnes of the metal. Thus the price of copper may also indicate the degree to which we are shifting to low carbon. Supply is currently limited to very old mines which should be driving a higher price – but isn’t – and if a shift to low carbon was actually happening, you would expect the price of copper to be rising, not falling….

Data Sources: The Financial Times, The Periodic Table Book – Dorling Kindersley, Wikipedia

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