By Onome Amuge
Expectations of a massive stimulus package under the incoming administration of Joe Biden, the newly elected US president, has raised copper price on the London Metal Exchange (LME), creating a positive outlook for the red metal despite the current low consumption season worsened by the second wave of the covid-19 pandemic.
Three-month copper on the LME was up by 0.7 per cent to stand at $8,0006 a tonne, Wednesday morning, with commodity analysts predicting higher gains at the close of the day’s trading.
However, copper didn’t fare well on the Shanghai Futures Exchange (SHFE) as the most traded March copper on the contract surrendered early gains to close the morning session on a downside, losing 0.1 per cent at $9,102.29 a tonne.
Investors are also apprehensive about the market as top consumer, China levelled up covid-19 restrictions as a measure to prevent endangering the economy to the second wave of the pandemic.
On a positive note, analysts at Huatai Futures, China, are optimistic the expectation of an aggressive U.S fiscal policy is favourable for copper prices.
Meanwhile, aluminium prices continue to lose steam on the LME as the silvery-white metal recorded a decrease in global demand.
At the close of Tuesday’s trading, LME aluminium cash price and LME official settlement stumbled by $28 to stand at 1951.50, marking the third consecutive day of decline.
Three-month LME aluminium however beat the odds, gaining 0.15 per tonne to close at $1,973 per tonne.
On the other hand, benchmark aluminium price for the SHFE dropped for the second consecutive day to stand at $2271 per tonne at the close of Wednesday’s morning session.
The impact of LME aluminium inventory changes on prices is expected to trade between $1,900 and $2,010 per tonne, Wednesday.