Copper prices experienced an increase to close out the week due in part to hope for stronger Chinese demand and a rally in crude oil.
According to a recent report from Dow Jones Business News, China consumes roughly 45% of global copper supplies and economic trends in the Far East suggest a significant effect on prices for the industrial metal.
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“Right now the markets look rosy and there seems to be a reluctance to stand in the way of the move higher,” Matt France of brokerage Marex Spectron told Dow Jones. Also of note, growing crude prices have provided a boost to commodities with copper prices rising alongside oil.
The reason? According to the news source, the majority of investors buy and sell broad bundles of commodities and oil is typically involved, which leads to an effect on other commodities, in this case, copper.
Even Stronger Copper Prices on the Horizon?
This week’s developments for copper is nothing new as the metal has been rising strongly for the past month or more. Writes our own Stuart Burns:
“Copper consumers, of course, would like to know what they can expect for copper prices next year. Will they fall back or continue to be supported? So a letter yesterday to the Financial Times from Simon Hunt, one of the most experienced and respected analysts in the market, is of interest.”
How will copper and base metals fare for the remainder of 2016 and into 2017? You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds: