The warming of US-China foreign trade relations may increase the demand for copper
Copper edges higher for the 5th trading session in a row ahead of the G20 summit. Will Copper prices continue rising?
Within the framework of the G20 meeting on December 1, 2018, the President of the People's Republic of China Xi Jinping and the President of the United States Donald Trump will meet. Market participants expect the softening of the mutual foreign trade sanctions of the two countries, which may increase the demand for copper in China. Copper reserves on the LME exchange approached the 10-year low. A noticeable decline in reserves is also noted on the Shanghai Stock Exchange. The agreement between the Chinese copper smelter Jiangxi Copper and the British mining company Antofagasta about reducing the cost of enrichment and processing of copper ore contributed to the increase in demand for copper. The Chilean Copper Commission (Cochilco) forecasts that global copper production, including copper scrap processing, will be 23.5 million tons in 2018, 24 million tons in 2019 and 24.5 million tons in 2020. At the same time, net copper production (excluding scrap processing) will be much less: 20.5 million tons in 2018, 21 million tons in 2019 and 21.3 million tons in 2020. However, global demand, according to Cochilco, will be 23.6 million, 24.1 million and 24.5 million tons during the same period of time. Thus, in 2018–2019, a world shortage of copper is possible, which should be covered by reserves.
On the daily timeframe, Copper: D1 is correcting upward within the medium-term rising channel and approached the resistance line of the short-term downtrend. A number of technical analysis indicators formed buy signals. The further price growth is possible in case of an increase in global demand.
Summary of technical analysis
Position Buy
Buy stop Above 2.835
Stop loss Below 2.655
Copper edges higher for the 5th trading session in a row ahead of the G20 summit. Will Copper prices continue rising?
Within the framework of the G20 meeting on December 1, 2018, the President of the People's Republic of China Xi Jinping and the President of the United States Donald Trump will meet. Market participants expect the softening of the mutual foreign trade sanctions of the two countries, which may increase the demand for copper in China. Copper reserves on the LME exchange approached the 10-year low. A noticeable decline in reserves is also noted on the Shanghai Stock Exchange. The agreement between the Chinese copper smelter Jiangxi Copper and the British mining company Antofagasta about reducing the cost of enrichment and processing of copper ore contributed to the increase in demand for copper. The Chilean Copper Commission (Cochilco) forecasts that global copper production, including copper scrap processing, will be 23.5 million tons in 2018, 24 million tons in 2019 and 24.5 million tons in 2020. At the same time, net copper production (excluding scrap processing) will be much less: 20.5 million tons in 2018, 21 million tons in 2019 and 21.3 million tons in 2020. However, global demand, according to Cochilco, will be 23.6 million, 24.1 million and 24.5 million tons during the same period of time. Thus, in 2018–2019, a world shortage of copper is possible, which should be covered by reserves.
On the daily timeframe, Copper: D1 is correcting upward within the medium-term rising channel and approached the resistance line of the short-term downtrend. A number of technical analysis indicators formed buy signals. The further price growth is possible in case of an increase in global demand.
- The Parabolic indicator gives a bullish signal.
- The Bollinger bands have widened, which indicates high volatility. Both bands are titled upwards.
- The RSI indicator is above 50. No divergence.
- The MACD indicator gives a bullish signal.
Summary of technical analysis
Position Buy
Buy stop Above 2.835
Stop loss Below 2.655