copper, Copper Closes with 2% Rise After Hitting Lows Since 2016
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Copper Closes with 2% Rise After Hitting Lows Since 2016

 

The copper prices traded near their near-four-year lows on Thursday. After several consecutive sessions of collapses, the coronavirus pandemic intensified concern about global economic growth and demand for industrial metals.

Copper futures on the London Metal Exchange (LME) closed a three-session losing streak to settle 2% higher at $ 4,835 per tonne on a search for opportunities.

In the first hours of the session, the metal fell to $ 4,371. Its weakest level since January 2016, and has lost around 12% in the week. Prices are now one step away from hitting their lowest level since the 2009 global recession.copper, Copper Closes with 2% Rise After Hitting Lows Since 2016

Economic activity in the world’s largest copper consumer, China, and in other major economies has collapsed because of government measures to contain the pandemic. Which has killed nearly 9,000 people so far. China is responsible for half of the world’s copper consumption. Fixed asset investment for January and February sank 24.5%.

 

The dollar is reaching its peak

Central banks around the world have accelerated their efforts to sustain the global economy in the face of restrictions to stop the spread of the disease, which has infected thousands of people.

Ole Hansen, head of commodity strategies at Saxo Bank, said that we are beginning to reach a point where the market almost incorporates the news that there will be a recession. But these low prices will mostly have an impact on the mining companies’ ability to produce the metal, he said.

In another factor weighing on the market, the dollar continued to strengthen due to the high demand from companies, banks, and investors. A stronger US currency makes commodities more expensive for foreign investors.

 

The surplus in supplies is pushing copper operators to cut production

 

Another crucial point is the abundant supplies. Markets await more deliveries of industrial metals to LME warehouses. While end-users in Europe and the United States close their operations.

The pressure on mining companies is increasing. On Wednesday, Chilean state-owned Codelco – the world’s largest copper producer – said it would cut its operations by 15 days. This is to comply with a declaration of a state of catastrophe in the South American country.

Among other industrial metals, aluminum fell 1.2% to $ 1,630 a ton; zinc closed stable at $ 1,847 a ton, tin gained 2.4% to $ 13,900 and nickel decreased 1.3% to $ 11,250.

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