Bearish outlook for short-term copper prices

-

Copper prices have been volatile in recent weeks. Falling from $4.2 per pound on February 23rd to $4 per pound a couple days later, before rebounding to $4.17 per pound on March 1. The first drop in copper prices may be linked to weak Chinese demand. Furthermore, the likelihood of further increases in US interest rates caused the US dollar to rise, making metals more expensive to import and signaling an inflation still difficult to curb.

Copper Price last Month: 

Today, March 05, during the first of two national meetings in the Chinese parliament, Premier Li Keqiang announced a 5% target growth in GDP. This is below the 6% analysts had predicted. Meanwhile, the US Fed signals that fresh data on inflation and employment levels points to adjusting the planned 25 basis point increase in interest rates. Next week’s comments from the Fed chair, Jay Powell, will set the stage for the upcoming policy meeting on March 21-22, but there are already talks that we will see a 50 basis point increase at the next meeting.

Volatility seems to be the new norm for copper, and even though Chinese demand is on the rise following this year's re-opening of the country, we see copper prices falling in the short term. 

 

Comments

Post a Comment

Popular posts from this blog

Despite the first increase in cobalt prices in six months, the future price projection of cobalt remains bearish.

-
Image
  For the past few years, the cobalt market has been plagued by a surplus, resulting in a downward trend in prices. Nevertheless, the price of cobalt recently increased slightly, rising from USD 34,180 per ton to USD 34,930 per ton, marking the first upward movement in six months. The price increase was caused by market participants restocking cobalt metal as well as a small increase in demand in the United States.                                                           Cobalt price in USD/per ton over the last 6 months. Source: TRADING ECONOMICS   Despite this short-term price increase, the cobalt price outlook remains bearish. The primary reason for this is a market oversupply of cobalt, which has resulted in inventory buildup. Supply is expected to increase by 24% overall ...
Read more

Copper prices hit 7-week high on easing banking crisis and weaker dollar

-
Image
                      London Financial Hub, United Kingdom. Credit: https://www.bu.edu/gdp/. Photo by: João Barbosa via Unsplash. Copper prices have risen in recent weeks, reaching a seven-week high due to a variety of factors. The price ends the week at $4,12 per pound according to TradingEconomics. The easing of the banking crisis, which has strengthened investor confidence and led to greater demand for commodities such as copper, is one of the key drivers of this boom. Simultaneously, a weaker US currency has led to increased pricing, making copper more appealing to international buyers. Low inventory quantities at the London Metal Exchange (LME) have also contributed to the spike in copper prices, fueling concerns about supply shortages. This has resulted in increased trading activity, sending prices even higher. The copper inventory volumes ended up at 56 800t, the lowest it has been since 20...
Read more

How the Collapse of Several US Banks Affected Copper Prices

-
Image
  Copper prices have been falling for months due to various factors such as China's economic slowdown, inflation and interest rates. However, this past week saw a dramatic drop in copper prices after two major US banks collapsed, triggering a wave of panic and uncertainty in the financial markets. The banks that failed were Signature Bank and Silicon Valley Bank, both of which catered to the tech industry and had large exposure to risky loans and investments. The banks faced a bank run as depositors withdrew their money en masse, leading to a liquidity crisis that forced regulators to close them on March 12. This was the first time since 2008 that a US bank with more than $10 billion in assets was shut down by regulators. The collapse of these banks had a ripple effect on the global economy, as they were connected to many other financial institutions and businesses. The stock market plunged, credit markets froze and investor confidence plummeted. Copper prices also suffered as trad...
Read more