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Copper Rebounds As Coronavirus Infections Ease, Output Slows

February 12, 2020 at 18:17 by Andrew Moran

Copper futures are rebounding midweek as investors pour into the industrial metal amid reports of stabilization in Wuhan coronavirus infections and a slowdown in production levels. Copper prices plunged over the last month mostly due to Chinese demand concerns. Despite the tepid bump in the metal commodity, analysts are still expecting a short-term slump.

March copper futures picked up $0.018, 0.7%, to $2.601 per pound at 16:59 GMT on Wednesday on the Comex division of the New York Mercantile Exchange. The red metal has plummeted more than 9% in the last month, but it is up 0.6% so far this week.

On Wednesday, China recorded its lowest number of new coronavirus cases in two weeks. A senior Chinese medical adviser predicted that the epidemic could be finished by April since the number of new cases keeps falling. With Beijing unleashing monetary and fiscal stimulus measures to contain the economic damage from the outbreak, investors are bullish that the world’s second-largest economy could limit the substantial downward trend that many analysts are forecasting.

Right now, global financial markets will keep an eye on factory activity and consumer spending that observers say will be the two areas of the economy that will experience the most damage. Everything remains unclear at this point because a paucity of precedent and a lack of new data are hindering estimates.

In the meantime, the consensus among experts is hope for the best but prepare for the worst.

Beijing has put forward plenty of stimulus measures to boost growth. Some of these include across-the-board tax cuts, more than $200 billion of liquidity injected into financial markets, the approval of major construction projects, and keeping interest rates low. Because fiscal revenues came in lower last year, many are warning that the federal government’s efforts might be capped.

In other industry news, Chile announced that production has fallen by 44,000 tons because of declining ore grades at large deposits, operational malfunctions, and water scarcity. Many copper companies, such as Glencore, have also lowered their output estimates. But Peru recently boasted its record output of 2.46 mt in 2019, up 0.8% from the previous year.

In other metal commodities, April gold futures edged up $0.90, or 0.057%, to $1,571.80 per ounce. March silver futures tumbled $0.10, or 0.58%, to $17.495 per ounce. March platinum futures slipped $5.40, or 0.55%, to $968.10 an ounce. March palladium futures soared $53.90, or 2.38%, to $2,319.60 an ounce.

If you have any questions and comments on the commodities today, use the form below to reply.

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