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Copper Futures Higher on Economic Data, Investor Sentiment

March 29, 2017 at 17:11 by Andrew Moran

Copper prices have risen to their highest levels in more than a week on positive economic data and higher investor sentiment. The industrial metal, which is trading relatively flat midweek, is continuing its strong start to 2017.

May copper futures rose $0.005, or 0.19%, to $2.681 per pound at 16:41 GMT on Wednesday on the New York Mercantile Exchange. Copper prices are trading at one-week highs. Year-to-date, copper has advanced more than 6%, and has spiked close to 20% over the last 12 months.

The red metal is benefiting from strong US economic data and growing expectations of stronger second-quarter demand. Moreover, US consumer confidence has climbed to a 16-year high due to increasing labor market optimism.

Ostensibly, the same type of positive data can be found in China, the largest consumer of copper. Manufacturing activity jumped for the eighth consecutive month, buoyed by a surprise boom in construction, which helped boost sales of building materials, like steel, copper, and cement.

Copper futures were impacted by a recent agreement by the nation’s top copper smelters. Following disruptions to the globe’s two largest copper mines, Chinese main copper smelters agreed to an 11% cut in refining and treatment fees in the second quarter.

Since the election of US President Donald Trump, copper has been soaring, primarily because of renewed infrastructure spending efforts. Copper has been further supported by supply disruptions in Chile and Peru as well as other infrastructure spending initiatives in the UK, Canada, and China.

The sliding US dollar has also played a big part in copper’s rise. The greenback, which is up 0.04% on Wednesday, has been trading at seven-week lows, and is down roughly 1% year-to-date. A weaker dollar helps commodities like gold, silver, and copper because it makes it cheaper for foreign investors to buy.

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