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On Wednesday (July 13), the copper price in London reached its highest level in roughly two months, briefly settling in over $5,000 per metric tonne.
On Wednesday (July 13), the copper price in London reached its highest level in roughly two months, briefly settling in over $5,000 per metric tonne.
Copper prices on the London Metal Exchange reached as high as $5,032 per tonne before dipping back down to $4,938.
One reason the price surged was the result of a weaker dollar and the anticipation of the Bank of England’s rate decision that will take place on Thursday.
Another reason is, despite a dim fundamental outlook for prices, there is new mine supply on the way.
Reuters reported strong import data to top consumer China and investors expecting Beijing to bring the economy to new heights as additional reasons for the price surging. That being said, the first six months of 2016 were strong due to China’s boost in imports.
“Overall, the June import data point to solid Chinese commodity demand,” analysts at Capital Economics said in a note to clients, as written by Nasdaq.
Although China’s copper imports fell 2.3 percent in June to 420,000 tonnes, increasing demand is still a go. What’s more, China is responsible for roughly 45 percent of global copper production, which causes metal prices to mirror its economic success, according to Nasdaq.
Helen Lau, analyst at Argonaut Securities, said to Reuters about China’s refined copper production that, “It’s still able to accept such relatively solid imports. That reflects good and improving demand.”
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.
