Copper futures prices rose Wednesday for a seventh consecutive trading day. Front-month copper futures contract rose 0.4% to $3.5325. That is the longest winning streak since February 2021. Copper prices have bounced from their lowest level since November 2020 but still off about 30% from 2022 highs. The tight supply from Chile, coupled with lower supply from the ongoing war in Ukraine, has boosted prices. The strength in copper has been boosted by a weaker USD off 25 year plus highs
Copper imports in China, the world’s largest copper consumer, gained in August. The rise in demand has allayed investors’ fears that stringent lockdowns and travel restrictions would hurt demand for copper. Through the year China’s strategic stockpiling body, the State Reserve Bureau gradually released some of its stockpiles of copper, aluminum and zinc analysts said.
China consumes half of the world’s refined copper. Copper hit record highs earlier this year partly because of supply concern related to the war in Ukraine and sanctions on Russia. Copper and iron ore had been bought aggressively through 2021-2 in a broad rally of industrial metals.
Copper had been getting speculative support because of its potential role in a transition to green energy and because of tight supplies due to lockdown-related mine closures. As such copper also benefited from economies reopening causing speculative bets to be placed and bullish predictions from brokers and analysts fed the fire. The reverse has happened with the supply and inflation crush in 2022 and the global central Bank interest rate rises.
Impact on Freeport McMoRan
Freeport-McMoRan $FCX, the world’s biggest publicly listed copper producer has also risen, FCX 30.51▲ 2.97 (10.7%) the past week.
The question how much hot money is in the mix?
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