![]() Supply out of Latin America could drop further as community protests against copper mines in Peru have increased and 3,000 workers were furloughed at the start of June at the La Bambas mine, one of the world’s largest, after it suspended operations in April. The Chilean Copper Commission (Cochilco) reported that state-owned mining firm Codelco produced 6.1% less copper year on year in April, with production down by 5.8% year to date.Īnglo American ( AALI) saw a 37.7% decline in April, with its year-to-date output down by 22.1%. “The support from authorities should increase the odds that the renewable energy sector will continue to see strong growth and support the demand for metals such as copper and aluminium,” analysts at Dutch bank ING noted.Īt the same time as traders are anticipating a rapid bounce in demand from China, protests in Peru have the potential to disrupt supply, while Chilean output has fallen. With the reopening the Chinese government released new guidelines to accelerate clean energy growth, including the construction of major wind and solar farm projects. The fundamental driver being the reopening of China raising demand expectations, thereby driving a sharp improvement in the technical outlook forcing speculators to reverse positions from a short back to a net long.” “The 61.8% retracement of the April to May correction, with a break signalling a fresh push towards $4.86. How is copper affected in times of recession? But the fact that the number remained below 50 indicated that business conditions deteriorated for a third straight month. The monthly purchasing managers’ index (PMI) compiled by Caixin moved up to 48.1 in May, from a 26-month low of 46 in April. Housing construction is one of the biggest consumers of copper for wiring, plumbing and home appliances. Despite government stimulus and reduced regulatory pressure in the housing sector, sales of new homes in 23 major cities dropped 33% year on year during a five-day national holiday in early May. Traders liquidated their long positions as macroeconomic data from China showed the impact of lockdowns on consumption. ![]() A stronger dollar tends to weigh on prices for dollar-denominated commodities such as copper as they become more expensive for overseas buyers with foreign currencies. The copper market sold-off sharply from 18 April until 12 May, shedding 15% to reach $4.10 a pound, its lowest level since September, as the US dollar strengthened to a near 20-year high and Chinese lockdowns continued to hit consumption. The price then retreated to $4.50 on 15 March before moving back up by 18 April. The COMEX copper price jumped by 11% from $4.45 on 28 February to $4.94 on 4 March. Manufacturing plants in Changchun suspended operations and construction work was halted in Shanghai, reducing consumption in the world’s largest copper market.īut the copper price history shows that the market then rallied at the end of February as traders weighed the impact of the Russia-Ukraine conflict on commodities and stockpiled industrial metals. The price trend of copper was choppy at the start of the year as pandemic-related lockdowns across several regions in China raised concerns about a slowdown in economic growth just as industrial production ramped up following the Lunar New Year holiday. Geopolitical events drive copper price volatility SPXS Direxion Daily S&P 500 Bear 3X Shares TECL Direxion Daily Technology Bull 3X Shares UVXY ProShares Ultra VIX Short-Term Futures ETF ![]() SOXL Direxion Daily Semiconductor Bull 3X Shares
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