Copper prices on the London Metal Exchange went bullish, Wednesday morning strengthened by dealers’ optimism about the metal’s global outlook due to rising demand. However, the red metal slipped on the Shanghai Futures Exchange as policy tightening by China, the world’s leading consumer, raised concerns over an impending drop in demand.
Three-month copper on the LME rose 0.9 per cent to $8,859.50 a tonne while the most-traded April copper contract on the ShFE shed 1.4 per cent at 65,720, approximately $10,093.84 a tonne.
Reacting to copper’s recent volatile trend, Anna Stablum, commodities broker at Marex Spectron, a UK-based tech-enabled liquidity hub which connects clients to the metals markets, said metals are hostage to large moves in the macro space but fears of ‘asset bubbles’ have slammed Chinese equity hard. She added that upcoming sessions are likely to be volatile.
“We might start to see some downstream copper users be more willing to come in and purchase metal after the latest price drop, but most likely, we will need to see prices stabilise first,” she said.
On the other hand, analysts have asserted that copper is pegged to benefit from a global economic recovery as many countries are on a positive course in the fight against the covid-19 pandemic. However, with the Shanghai Dalu Futures cutting its long position on the May Shanghai copper contract on Tuesday by nearly 25 per cent, there are worries that a sustained policy tightening in China is likely to clamp the demand of copper and its inflow into financial markets.
Frontpage September 11, 2019