The term “Dr. Copper” is sometimes applied to the price of copper to describe the red metal’s supposed omniscience in predicting changes in the state of the world economy. In the industrial industry, copper is frequently used in machinery, finished products, and intermediate items such as pipes and tubes. Copper is used in the installation, power, and telecommunications industries because it is a good conductor of heat and electricity. Meanwhile, it is widely employed as a good heat conductor in the transportation equipment business.
Copper miners bear all the risk (and reward) of changing copper prices. When there is a lot of copper ore available, treatment and refining costs increase. Therefore, it is clear that lower copper prices caused by an increase in ore supply may be offset by higher treatment and refining costs.
Due to a weaker currency and anticipated rising demand from top user China, copper rose on Friday and was on track to post a weekly gain. However, lingering concerns about a global recession dampened investor optimism and limited gains.
The three-month copper price on the London Metal Exchange rose 0.9% to $9,384.50 a tonne, taking its gains this week to 2.2% and for the full month to 12.8%. . On the Shanghai Futures Exchange, the most active copper contract for March closed at 70,420 yuan ($10,399.47) a tonne, up 2.3% on the week.
Fears of a copper recession persist
After the Chinese New Year, investors anticipated a significant pickup in physical demand. The dollar index hovered near a seven-month low. Making the dollar-priced product more attractive to holders of other currencies.
According to Zerlina Zeng, senior research analyst at Fitch Solutions, “For now, onshore physical data is weak, copper demand remains 10% lower year-over-year, and import arbitrage is negative.”
Onshore traders, however, are becoming more optimistic about China’s macroeconomic outlook. Which helped keep copper import flows reasonably strong based on authorized imports through Shanghai.
Due to the Lunar New Year holiday, the exchange will be closed for trading on Friday night and the following week. Strong foundry production this month and consumption still weak. According to CITIC Futures, it could lead to a higher than normal stock build over the holidays, up to 300,000 tonnes.
Among other metals, LME aluminum rose 1.2% to $2,618.50. Zinc decreased 0.6% to $3,438. Tin rose 1.7% to $29,300. Lead decreased 0.2% to $2,138 per ton.
Aluminum rose 2.1% to 19,465 yuan. Lead decreased 0.7% to 15,190 yuan. Zinc rose 1.6% to 24,765 yuan and tin rose 3.8% to 238,960 yuan a tonne on SHFE. Nickel rose 5.5% to 223,130 yuan a tonne.
