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Copper Falls on Thursday, Still Heads for Monthly Gain

April 30, 2020 at 16:28 by Vladimir Vyun

Copper fell today but was still heading for the biggest monthly gain since December 2017. While the coronavirus pandemic and the resulting drop of consumption hurt the industrial metal, output was also falling due to the COVID-19 outbreak. Glencore’s copper production dropped 7% in the first quarter of 2020 from the previous year to 320,700 metric tons, missing analysts’ projections by a wide margin. Furthermore, the company reduced its outlook for this year’s production by 5.2% to 1,460,000 tons. Other mining giants, like Anglo American, BHP Group, and Rio Tinto also reduced their production forecasts.

Meanwhile, Chile’s Mining Minister Baldo Prokurica said that the mining industry of the South American nation was among the least affected by the pandemic in the world, with output falling by just about 1%.

Copper stockpiles in China, the biggest consumer of the metal in the world, dropped to the lowest level since September 2017. Inventories in warehouses tracked by the Shanghai Futures Exchange dropped by 36.6% in April from the previous month to 230,956 metric tons. China’s official data released today showed that the manufacturing sector continued to recover, albeit at a slower pace. But a private report suggested that China’s manufacturing contracted a bit. The problem is that, while the Asian nation eased measures aimed at preventing the spread of the COVID-19 disease, most other countries around the world remained on the lockdown, limiting demand for China’s exports. That should change after the rest of the world starts exiting lockdown too.

Futures for delivery of copper in July fell by $0.028 (1.18%) to $2.3425 per pound as of 16:26 GMT on COMEX today. Gold for delivery in June declined by $13.1 (0.76%) to $1,700.3 per troy ounce. July contract for silver dropped by $0.24 (1.57%) to $15.08 per ounce. Spot price for platinum went down by $7.55 (0.97%) to $773.5 per ounce but palladium managed to rally by $16.8 (0.86%) to $1,966.49 per ounce.

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