By Paul Ploumis (ScrapMonster Author)
March 04, 2016 03:12:38 AM
SEATTLE (Scrap Monster): The London Metal Exchange (LME) three-month copper prices jumped higher to hit the highest level in more than three months. The LME 3-month copper hit $4,856 per tonne, its highest since early-November 2015. The rising hopes of possible global economic growth coupled with lower US Dollar resulted in rise in copper prices. The prices have gained over 12% since the lows recorded during the third week of January this year. However, analysts remained cautious on possibilities for further gains on the metal.
According to Commerzbank analyst, clear signs of economic improvement from across the globe could result in further gains. The downside risk for the metal comes mainly from China, it noted. If the economic data out of the country signals further slowdown, the equities and metals could come under further pressure. Incidentally, China’s demand growth has slowed to nearly 2%, compared with more than 5% during the previous years. The country accounts for nearly half of the global copper consumption.
The surge in copper and other base metal prices is mainly on optimism over China’s economic stimulus measures. The market expects measures from Chinese policy makers to boost the country’s economy during the legislative meetings scheduled on Saturday.
Meantime, Codelco has forecasted global copper surplus during 2016 and 2017. In its latest report, the world’s largest copper producer expects the copper prices to remain extremely volatile. It expects the prices to range between US$2 and US$2.10 per pound. Further, the market will turn to deficit during 2018 and 2019. The market deficit is likely to range between 50,000 and 100,000 tons in 2018. The deficit will rise further to 300,000 - 400,000 tons in 2019, Codelco notes.
