Copper price rises despite global economic pessimism

Copper price rises despite global economic pessimism

Antofagasta’s Los Pelambres copper mine in Coquimbo Region, north-central Chile. (Credit: Consejo Minero)

The copper price rose on Friday but was set to end the week slightly lower as traders balanced hopes for solid demand in China with pessimism about the global economy.

Copper for delivery in September rose 1.1% on the Comex market in New York, touching $3.67 per pound ($8,074 per tonne).

Inflation data in Germany and Japan on Friday and statements from European and U.S. central bankers this week suggest that rapid, economically damaging interest rate rises will continue.

Investors turned cautious, pushing down global equities and driving up the US dollar — pressuring dollar-priced metals by making them costlier for buyers with other currencies.

Many analysts expect recessions in Europe and the United States and slower growth elsewhere, including in China.

China, however, is widely expected to lower its benchmark lending rates on Monday and has pledged other stimulus to support its economy.

Chinese demand is unlikely to revive strongly because its property market is in crisis, infrastructure construction is not rapid enough and export demand is weak, said Julius Baer analyst Carsten Menke in a note.

“I would not bet on any further recovery (in metals prices) from here,” he said.

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