The main copper products traded on the international market ranked according to popularity are copper cathode (refined copper), copper concentrates, and blister. The daily price for refined copper (cathodes) is determined through transactions made in the London Metal Exchange (LME) and in the New York Commodity Exchange (NYMEX) the price of the other products is calculated using cathode prices as a base and discounting the price of the additional processes that are required to refine the product until it becomes a cathode. These discounts correspond to treatment charges (smelter) and refining charges (refinery).
The treatment and refining charges vary in the international market according to available capacity of the smelters and refineries all over the world and the availability of copper concentrates in the market. The price of copper generally represents an accurate barometer of the demand for the metal, rather than a “bet” on its future value. Speculation over inflating the price can be observed in silver and gold, and it is easy for an investor to spot check speculation by observing the discrepancy between the spot price and futures price of a metal. Copper is cheap, heavy, and plentiful. For these reasons, copper is not hoarded on speculation, but instead it is purchased as needed. There is some hedge fund speculation when it comes to copper; however, this is not popular enough to significantly impact the price.