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Copper prices unexpectedly jump to 7-week high

Schedule copper prices at intervals of 1 day

Copper prices jumped to a seven-week high, with the metal showing signs of renewed bullishness amid the outlook for strong demand and rising inflation as the economy recovers.

Strong US and China economic data released last week pushed the MSCI All-Country World Index to renew its all-time record, despite concerns about slow progress in the fight against Covid-19. in Europe and India. At the same time, the dollar fell, making commodities cheaper for investors buying commodities with currencies other than the dollar.

Copper is often referred to as an indicator of the health of the global economy. The price of this metal ended an 11-month uptrend in late February amid fears of a global economic recovery due to problems with vaccinations in Europe and the prospect of a reduction in stimulus in China. Now copper is rising for 2 weeks in a row, with the price approaching a nine-year high reached in February.

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The main theme of the upward trend is that spending on low-carbon energy sources will increase the demand for copper, which is used in electric grids and electric vehicles.

“After being stuck in consolidation mode since March, copper on the LME resumed its bull growth last week,” Venyu Yao, senior commodities strategist at ING Bank NV, said in an email.

The current global inflationary environment and negative real rates are a tailwind for the entire commodity sector, and copper stands out for its constructive fundamentals, said Venu Yao, Senior Commodities Strategist ING Bank.

Copper rose 1.8% to $ 9,376 a tonne after hitting $ 9,436 during the session, the highest level since February 25. At the end of February, prices reached a nine-year high of $ 9,617 per tonne.

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Fifteen of China’s largest copper smelters said they will increase their use of recycled metal as raw materials, which will allow them to use less copper from the mines.

The rest of the metals were mixed on Monday, with nickel falling 2.2% to $ 16,010 a tonne as investors focused on the potential for increased supply from the Philippines, the main producer of nickel ore.

Philippine President Rodrigo Duterte signed an order last week allowing the government to approve new mining contracts, lifting a ban introduced in 2012 and allowing the country to boost revenues. The move could boost supplies of nickel ore from the country’s second-largest mined country after Indonesia. Shipments are expected to start picking up as soon as the rainy season ends.

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The Chinese company Tsingshan Holding Group signed an agreement on the supply of nickel matte, which is used for the manufacture of batteries for electric vehicles (EVs), with Huayou Cobalt and the manufacturer of battery materials CNGR Advanced Material, Oksana Lukicheva, an analyst on Otkritie Broker commodity markets, wrote in early March. Tsingshan Holding Group announced that it will supply 60,000 tonnes of Huayou Cobalt nickel matte and 40,000 tonnes of CNGR Advanced Material during the year starting October 2021.

Tsingshan Holding Group is the largest stainless steel manufacturer in China and has many large nickel mining and processing projects in Indonesia. The company has been investing in Indonesian projects since 2008.

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