Despite an increase in coronavirus cases in China, speculators surprised the market with a series of purchases. Subsequently, Copper prices rebounded on Friday.
Copper on the LME (London Metal Exchange) rose 0.7% after three months, to $ 5,765 a ton, after falling to $ 5,684 earlier.
Copper traded low or almost stable most of the day until the disclosure of harmful data of purchasing managers in the United States, which in turn hit the dollar index. A weaker dollar lowers the prices of commodities dubbed in dollars for holders of other currencies.
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Robert Montefusco, an operator of Sucden Financial, said that it’s a bit strange because if the economy is particularly weak, usually primary metals react negatively. We saw support at low prices, then we saw a series of speculator purchases and generated orders to curb losses on the rises. Perhaps it is the failure to continue down, he added.
Fears about the spread of the virus pushed copper to a minimum in almost two years this month. It generated the biggest losing streak since at least 1977.
The world refined copper market showed a surplus of 33,000 tons in November. On the contrary, copper recorded a deficit of 15,000 tons in October.
In other primary metals, lead declined 2.8% to $ 1,831 tons, its lowest level in more than a week. Aluminum rose 0.2% to $ 1,713.50; zinc grew 0.1% to $ 2,115 and tin rose 0.3% to $ 16,630 a ton.
Coronavirus Hit the Latin American Economy
The outbreak has generated economic problems that have also shaken the world markets for raw materials. It has primarily affected several Latin American countries. Valeria Moy, a Mexican economist, says that the current situation is more severe than expected. The speed at which the virus is spreading is causing a lot of fear.
The prices of copper, iron, or aluminum have collapsed since the epidemic began, affecting Brazil in particular. Other strongly influenced Latin American states have been Chile and Peru, the two largest copper producers on the planet. If the epidemic continues to plague China, as expected, both countries fear a severe setback to their economies because of the impact that metal exports represent on GDP.
Uncertainty about the real impact of the virus remains the point of reference reached by analysts and investors. The new contagions announced over the weekend have once again reinforced the idea that the outbreak may affect the growth of the world economy.