Commodity Blog

Copper futures are rebounding from last week’s profit-selling on Tuesday as investors see improving market conditions for the industrial metal. Heading into 2020, the red metal is looking to stay well above the $2.80 mark and end the year with an admirable gain, despite everything that happened this year.

January copper futures rose $0.0165, or 0.59%, to $2.825 per pound at 16:57 GMT on Tuesday on the Comex division of the New York Mercantile Exchange. Year-to-date, the red metal has advanced nearly 7%, enjoying a bull run since the end of September.

Following announcements of the USMCA and phase one of the US-China trade agreement, copper prices posted healthy gains, leading to traders taking the profits. Since then, the industrial metal has rebounded, and the forecasts suggest it could experience a breakout in the first half of 2020 amid trade certainty and optimism in the global manufacturing sector.

According to recent survey data compiled by IHS Markit and JPMorgan Chase, global manufacturing pointed to expansion for the first time since April. At the same time, however, Moody’s forecasting model alluded to a negative outlook for the sector in the short-term.

Overall, the price of copper could ring in the new year rallying on improved trade relations, important industrial markets in Asia getting better, and investor interest for base metals over the next six months.

Another big play for copper could be tightening inventories. It has been reported for months that the global copper market could experience a supply deficit over the next 18 months with output diminishing, new mines not opening in time, and possibly higher demand either from a strong economy or government stimulus.

Recently, copper stockpiles in London Metal Exchange (LME)-approved warehouses slipped to a nine-month low of 160,825 tons.

Meanwhile, the Chinese Ministry of the Environment’s Solid Waste and Chemicals Management Bureau published import allowances for 270,885 tons of high-grade copper scrap for next year. It also approved 275,465 tons of aluminum scrap. Beijing’s aim for next year is to ensure that no more imports of scrap metal are classified as waste.

In other metal markets, January gold futures tacked on $15.60, or 1.04%, to $1,504.30 per ounce. March silver futures soared $0.335, or 1.92%, to $17.835 an ounce. January platinum futures picked up $8.50, or 0.91%, to $946.90 per ounce. January palladium futures edged up $0.50, or 0.03%, to $1,849.50 per ounce.

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