The past two years have been a rollercoaster ride of higher borrowing costs and a relatively strong dollar, creating a turbulent atmosphere for metals.
However, a recent spark of hope has ignited due to a pledge from China’s central bank to provide financial support for the property sector, a major consumer of industrial metals, resulting in elevated expectations for increased copper consumption.
Amidst the excitement, Dan Smith, head of research at Amalgamated Metal Trading, expressed, “There’s a fair amount of stimulus in the pipeline and we are in a seasonally strong period.”
He added, “For me, copper demand looks strong in China, primarily in the green sectors. We know utilization rates at wire rod plants picked up into mid-November.”
The surge in copper prices is evident, with December delivery prices rising by 2.1% on the Comex market in New York, reaching a staggering $3.81 per pound ($8,382 per tonne).
[Interactive Copper Prices Chart]
Concerns have been raised about reduced ore processing due to protests at First Quantum Minerals’ Cobre Panama mine, responsible for 1% of global copper output, contributing significantly to the ongoing support of copper prices.
Related News: First Quantum to halt Panama mine if blockade goes on
(With files from Reuters and Bloomberg)