The copper price firmed on Wednesday as the dollar dipped on lower-than-expected US inflation figures, which softened expectations for stimulus to be tapered soon.
Copper for delivery in December rose 2.3% from Tuesday’s settlement price, touching $4.422 per pound ($9,728 per tonne) midday Wednesday on the Comex market in New York.
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Copper and other base metals were mostly trading on macroeconomic factors such as the US inflation which lowered the likelihood of the Fed withdrawing liquidity soon, said Saxo Bank analyst Ole Hansen.
Capping gains in most metals were faltering factory and retail activity in August in China, owing to fresh coronavirus outbreaks and supply disruptions. The country accounts for about half of global metals consumption.
Alastair Munro at broker Marex told Reuters the ongoing bearish macro sentiment seen in China’s below-expectation economic data could already be “largely built into current price levels.”
Chile’s copper commission Cochilco has revised down its average copper price forecast for the year to $4.20 per pound from a previous estimate of $4.30 per pound on the back of slowing Chinese demand and expectations of an easing in the US stimulus.
Cochilco expects prices to average $3.95 next year as the market swings into surplus.
Global copper demand will reach 24 million tonnes this year, up 2.4% compared to 2020, and 24.7 million tonnes for 2022, a 3% increase.
Expected 2021 copper production in Chile, the world’s top copper-producing nation remains around 5.8 million tonnes.
(With files from Reuters)