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Copper price in last ditch rally
The miners “are being hit from two sides,” Daniel Briesemann, an analyst at Commerzbank, told the wire service, pointing to fears of a global recession and unprecedented disruptions to operations in South America.
China is responsible for more than 50% of the world’s copper consumption.
Copper bounced on Tuesday after a rebound in Chinese manufacturing activity, but analysts cautioned that the market is far from returning to normal levels.
Copper trading in New York rose by more than 4% to $2.248 a pound ($4,955 a tonne) on course to contain its first-quarter losses to below 20%. Two weeks ago the bellwether metal briefly traded below $2.00, levels last seen during the global financial crisis of 2008-2009.
The official manufacturing PMI increased from a record low of 35.7 in February to 52.0 in March, according to China’s National Bureau of Statistics. This jump was driven by a rise in the output and new orders components, with readings above 50 indicating expansion.
If anything, we suspect that the risks to this forecast are to the downside.
Thereafter, if we are right in assuming a steady relaxation of virus containment measures, the price of copper should start to rise again from the second half of 2020.
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