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Real Historical Copper Price

Much is made of today’s record copper prices, without any analysis of history.  The chart below shows the average annual copper price going back to 1900, adjusted to 2010 dollars.  The annual average peaked in 1907 at $10,350 per ton.  The long run 110 year average is $5,150 per ton.  Mean reversion is much talked about in equity markets.  I don’t see why copper prices will not revert to their long run average.  From 1900 to today, global copper production has kept up with demand, and price has always responded accordingly.  The bullish case for copper all rests on China’s increasing demand.  If that demand fails to increase, I don’t see why copper prices would remain at this level….they never have in the past 110 years.

Real Historical Average Annual Cu Price