Price Changes of a Commodity
Prices of commodities vary depending on production costs, supply, demand, etc. For example, a commodity like copper has been in the world market for a long time. Copper markets are competitive and highly unpredictable. Over the last decade, international copper prices have fluctuated creating increased volatility in the precious commodity. However, this has not deterred the growing demand for the commodity in the world, particularly in China (Anyadike, 67). China is the world’s biggest copper consumer. Copper is used for manufacturing electric wires, in the construction industry and in the production of transportation vehicles and industrial equipment. Canada is the third biggest producer and exporter of copper in the world today after Chile and USA producing more than 534,000 tons of copper. Chile is the world’s largest copper-producing country.
Canada was widely affected by financial crisis especially in its copper market. It is reported that Canada’s economy shriveled by an estimated 5.4 percent by the end of the first quarter of 2009. Copper is currently sold at $3.50 a pound, which is proving profitable to most producers and retailers. Demand for copper was seen from China, India and the United States of America (Capus, 33). The prices of copper and copper products have been advancing at an estimated rate of more than 2.6 percent. This was supported by a reduction in international supply because of labor disagreements and harsh weather conditions that affected the standard production, especially in South America.