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Copper Rebounds amid Lower US Dollar, Stronger Chinese Demand

March 6, 2018 at 17:40 by Andrew Moran

Copper rebounded on Tuesday as prices climbed to their best levels in about a month. The industrial metal surged more than 1% by a strengthening US dollar and market expectations of increased demand from China, the world’s largest consumer of copper.

May copper futures advanced $0.0335, or 1.07%, to $3.165 per pound at 16:25 GMT on Tuesday on the Comex division of the New York Mercantile Exchange. Copper prices are trading at a three-week high and are poised for their biggest gains since the middle of February.

Year-to-date, the red metal has tumbled nearly 5%.

Copper prices are gaining from a weaker US dollar as the greenback slipped 0.42%. A lower buck is good for dollar-denominated commodities like copper because it makes it cheaper for foreign investors to purchase. Year-to-date, the greenback has fallen close to 3%.

This month, important economic data will be coming out of China. Investors anticipate higher growth, buoyed by stability in many sectors of the national economy, including exports and factory activity.

According to London Metal Exchange (LME) data, on-warrant stocks have jumped by 111% in two days to 177,000 tonnes. This has diminished concerns of supply shortages, prompting zinc to reach its best level in more than 10 years. Meanwhile, copper inventories in Shanghai Futures Exchange (ShFE) warehouses soared to 150,000 tonnes this year.

Investors appear to be taking profits as traders slashed their net long positions 5.4%.

Other metals are rallying on Tuesday. April gold futures rose $16.90, or 1.28%, to $1,336.80 per ounce. May silver futures increased $0.413, or 2.52%, to $16.82 an ounce. May platinum futures edged up $9.90, or 1.03%, to $972.00 an ounce. May palladium futures climbed $4.30, or 0.44%, to $981.80 per ounce.

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