Copper price hits new high as covid cases sweep South America

Copper prices continued their momentum from the second half of 2020 as the second wave of coronavirus infections intensifies in South America, the world’s top copper-producing region.

Copper futures for March delivery advanced 0.3% to $3.652 per pound on the Comex, surpassing a near eight-year high set in December.

Copper prices have rallied over recent months as demand for the bellwether metal grows on the back of fiscal stimulus hopes and recovery in industrial activities, but rising covid-19 cases and lockdowns have also caused a supply crunch for the most traded metal commodity of 2020.

In Chile, the top copper producer, covid-19 cases crept up through the holiday season, reaching 26% of the country’s June 2020 peak.

RISING COVID-19 CASES AND LOCKDOWNS HAVE ALSO CAUSED A SUPPLY CRUNCH FOR THE MOST TRADED METAL COMMODITY OF 2020

Authorities in Chile say a second wave of infections has yet to arrive across most of the country. However, rapidly filling hospitals in some regions, including mine-rich Antofagasta, have been forced to fly patients south to the capital, Santiago, where more hospital beds are still available.

The situation is also dire in Peru, the second-biggest producer. Hospitals in the capital Lima and nearby Callao, which together serve a population of 10 million, had only 16 ICU beds with ventilators available early this week, according to a report from the Peruvian Ombudsman’s Office.

While the daily caseload in Peru remain at 20% of its August peak, authorities say more people have been hospitalized because many are waiting until symptoms are severe to take tests.

According to Morgan Stanley’s Andrew Sheets, coronavirus infections around the globe could potentially peak at the end of this month.