Copper futures are trading in positive territory midweek thanks to a weaker US dollar and reports that the industrial metal faces a potential deficit. The red metal is being further supported by concerns of work stoppages that may amplify supply concerns.
September copper futures rose $0.01, or 0.39%, to $2.68 per pound at 16:47 GMT on Wednesday. Copper futures have been trading at their highest levels in more than a week, spurring bullish sentiment that the prices may climb higher towards the end of the year.
Industrial disputes are helping the red metal post modest gains midweek. Workers in Chile have voted in favor of striking at a copper mine, while reports show that copper supplies have whittled down in Indonesia.
Meanwhile, top mining group, Codelco, tells Bloomberg that copper supplies are struggling to meet demand. Over the last month, international warehouse inventories have spiked 15%, which suggests that the metal may have a “promising future,” notes Codelco Chairman Oscar Landerretche.
Short-term reactions can be influenced by a thousand things. Copper prices have cyclical elements, but volatility has increased over time and that has to do with the fact that financial and speculative transactions around copper account now for more than half of transactions.
The US dollar has been trading a
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Other metal commodities are rallying. August gold futures increased $6.00, or 0.49%, to $1,220.70 per ounce. September silver futures surged $0.19, or 0.21%.
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