March copper futures fell $0.012, or 0.33%, to $3.614 per pound at 13:49 GMT on Monday on the New York Mercantile Exchange. The red metal is getting off a moderate weekly increase of 0.3%. This increases its growth in the first month of the calendar year to just under 3%. Over the last 12 months, copper prices have risen 40%.
China is the world’s biggest consumer of copper. Recently is has witnessed a resurgence of COVID-19 cases, requiring the government to lock down up to 30 million people. Chinese administrators have sprung into work, building a new hospital is shorter than a week to fight coronavirus infections’ resurgence. China’s new COVID-19 cases have risen to their highest levels in five months.
But the new entrance in infections is yet a part of what is happening in other parts of the world. As stated in the latest official numbers, China reported 109 new cases, increasing the seven-day standard to 114. As a result, the nation has recorded a little over 89,000 patients over the last 13 months, with a death toll of nearly 4,600. In contrast, the rest of the world is closing in on 100 million whole cases and a death toll of 2.13 million.
Beijing has been stockpiling copper during the economic improvement
The newest outbreak comes before the seasonally slow Lunar New Year holiday season.
Beijing has been stockpiling copper during the economic improvement, with imports rising, soaring by double digits every month after the end of the first wave of the coronavirus public health crisis. Nevertheless, some worries have been that Chinese shippers might decrease their copper purchases over the next several months because of abundant supplies and cash premiums decreasing. This could define institutional investors cutting their net-long positions.
Furthermore, Moody’s Investor Service predicted that copper prices would promote from January highs as essential markets, such as Chile and Peru, ramp up production to profit from these prices. The two South American countries consider for about 40% of the world’s output. That stated, Moody still expects copper prices to increase short-term due to shorter supplies between lockdowns and mobility constraints.
Overall, long-term fundamentals continue strong, the debt rating agency stated in its research note. Infrastructure investments, green energy consumption, and a lower US dollar will boost the red metal.
The dollar added to copper’s fall on Monday, with the US Dollar Index (DXY) rising 0.27% to 90.48, from an opening of 90.24. A more robust dollar is dangerous for commodities valued in dollars because it makes it more costly for foreign investors to buy.
In other metal markets, March gold futures dropped $0.3999, or 0.02%, to $1,855.80 per ounce. March silver futures slid $0.011, or 0.04%, to $25.545 an ounce. Platinum futures declinedl $6.60, or 0.59%, to $1,105.00 an ounce in March. March palladium futures crashed $20.20, or 0.85%, to $2,345.00 per ounce.