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Copper Hits Highest Level Since November 2014, Touches $3 Mark

August 22, 2017 at 16:40 by Andrew Moran

Copper futures surged to their highest levels in nearly three years on Monday as the industrial metal topped the $3 mark. The red metal has climbed more than 15% since the beginning of May, benefiting from a weaker US dollar, supply worries, and speculative investing.

September copper futures rose $0.01, or 0.30%, to $2.99 per pound at 16:22 GMT on Monday. The red metal is trading at its best level since November 2014, surpassing the $3 threshold before paring those gains. Year-to-date, copper prices have advanced nearly 20% and is having its best year since 2014.

China, the world’s biggest consumer of the industrial metal, has been one of the major factors for copper’s success. The world’s second-largest economy reported better-than-expected economic growth this year, which would raise demand for the metal. Beijing recently announced that it was cracking down on polluting businesses, a move that would slash the country’s refining capacity.

The US dollar has also played an immense role in copper’s ascent. The greenback slipped 0.6% on Tuesday and has tumbled to pre-election lows. A weaker US dollar is good for commodities like copper because it makes it cheaper for foreign investors to purchase.

Despite reports that there is an international supply surplus, many investors predict that there will be supply woes in the coming months. This prognostication stems from various labor disruptions occurring in Latin America and Southeast Asia, a trend that may impact copper supplies similar to what happened earlier this year.

It reported in July that the global copper deficit is expected to worsen, but analysts note that deficit concerns may already be priced in.

Investors are also waiting for the Trump administration to provide further details pertaining to its 10-year $1 trillion infrastructure project. The White House has made vague announcements about infrastructure, and it was reportedly going to outline the details earlier this summer, but nothing has come to fruition. If the US government moves ahead with its infrastructure spending, it would be a boon for copper.

Other metals are in the red on Tuesday. December gold futures tumbled $4.00, or 0.31%, to $1,292.80 per ounce. September silver futures rose just $0.005, or 0.03%, to $17.02 an ounce. October platinum futures fell $5.10, or 0.52%, to $980.40 per ounce. October palladium futures slid $5.86, or 0.62%, to $933.15 an ounce.

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