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Copper Futures Add to Gains As Demand Surges

August 21, 2018 at 17:59 by Andrew Moran

Copper futures are up about 1% on Tuesday, continuing its second consecutive day of gains. The industrial metal is rallying on news that US-China trade tensions are easing and there has been a jump in orders for copper. The red metal has been tumbling for three straight weeks, and now it is looking to snap that weekly losing skid.

September copper futures advanced $0.027, or 1.01%, to $2.695 per pound at 17:10 GMT on Tuesday on the Comex division of the New York Mercantile Exchange. Copper prices are rebounding this week after plunging 15% over the last three months. Year-to-date, copper is down 20%.

Like previous trading weeks, it is widely believed that the trade dispute between the world’s two largest economies is not escalating. This comes as a delegation from China and other Asian nations is heading to Washington next week to revive trade negotiations and come to a reasonable conclusion. President Donald Trump was asked about the upcoming talks, and he expressed very little hope of the deliberations making progress.

According to Bloomberg, there has been an immense withdrawal of copper from warehouses monitored by the London Metal Exchange (LME), the biggest increase since 2015. Reports show that the largest withdrawal orders originated from Singapore and Taiwan. This data suggests that there has been a recent surge in demand for the industrial metal, an important indicator for economic growth.

New data on Tuesday shows that China is accounting for about half of the world’s total demand, estimated at 24 million tonnes in 2018. The US, meanwhile, represents roughly 8% of global consumption.

Copper prices are finding support from a lower greenback as the US dollar tumbled 0.49% to 95.26, shedding more than 1.5% over the last five trading sessions. A weaker buck is good for dollar-pegged commodities because it makes it cheaper for foreign investors to acquire.

In other metal markets, December gold futures tacked on $5.50, or 0.46%, to $1,200.10 an ounce. September silver futures edged up $0.09, or 0.61%, to $14.76 per ounce. September platinum futures were flat at $794.90 an ounce. September palladium futures rose $6.10, or 0.68%, to $904.80 per ounce.

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