Copper hits eight-year high at $ 8,190 per tonne
Copper prices rose again on Tuesday as investors weighed in on the prospects of an accelerated stimulus package in the United States.
On the Comex market, copper delivered in March rose 1.5% to $ 3.723 per pound ($ 8,190 per tonne). If it closes at these levels, it would be the highest since February 2013.
The metal rallied in hopes that the economic recovery in the United States will further stimulate demand, and underpinned by declining Chinese stocks for the past decade.
House Democrats on Monday released the first draft for key pieces of legislation that will include President Joe Biden’s relief bill on covid-19. Democrats are moving forward with plans to raise the federal minimum wage to $ 15 an hour by 2025 and make another round of stimulus payments. Billions of dollars are planned for airline personnel, airports and trains.
Copper stocks on the LME, Comex and ShFE markets are at their lowest for several years.
βStocks are still pretty low on the stock markets. This gives a good indication that manufacturing demand for copper is present and that it is not just a speculative story, βNitesh Shah, analyst at investment manager WisdomTree, told Reuters.
In China, the world’s largest consumer, copper inventories normally pile up as the Lunar New Year approaches, as businesses close for the week-long festivities.
But this year, Chinese inventories have fallen to nearly a decade due to strong demand from factories, which keep operating rates high due to shortened downtime and tighter travel restrictions on workers.
Meanwhile, the effects of the coronavirus pandemic on the copper supply continue to be felt. In what was supposed to be a year of supply growth, global mining production in the first 10 months of 2020 was 0.5% lower than 2019 levels, according to the International Copper Study Group (ICSG).
In Peru, the world’s second largest producer, copper production plunged 12.5% ββto 2.15 million tonnes in 2020, the country’s Ministry of Energy and Mines announced on Monday.
