Long-Term Trends in Copper Prices

Real copper prices during the past several decades display two striking characteristics. First, they are highly volatile. Within a year or two, copper prices can rise or fall by 30% or more. Second, over the longer term, they are falling. Indeed, since 1970, the secular trend price for copper is down by more than 50%. Figure 1 highlights both of these characteristics. It shows the average annual US producer price for copper since 1970 measured in constant 2001 US dollars. While the London Metal Exchange (LME) copper price is not shown, it and the US producer price have for some time moved more or less together. So pronounced short-run fluctuations around a significant long-run decline describe copper prices, not only in the United States, but around the world.