1/18/2024 0 Comments Index price of copper cathodeChina has also announced significant stimulus packages to recover their pandemic-affected economy, which will also probably helps to support Copper prices. When Will Copper Prices Stop Falling And Rebound?Īs soon as the global economy reopens and the industrial activities attempt to a normal state, and in need of more Copper, Copper prices will automatically boom. So, we can expect a lower supply, and an improvement in the demand outlook could further boost Copper prices. China re-imposed Covid lockdowns in the second quarter, significantly metals demand lessened, and Copper prices dropped sharply, hitting almost 20-month lows.Īnd now, Copper prices are improving slightly on moderately high demand amid supply concerns and the ongoing fears of the global economy into recession due to consistent, aggressive interest rate hikes.Īt the same time, China's State Grid plans to invest more than 150 billion yuan ($22 billion) in the second half of 2022 in ultra-high voltage power transmission lines, expected to drive demand for Copper Base Metals in the future. The main drop in Copper prices is that the ongoing Covid lockdowns in the top metals consumer, China lessened the base metals demand.īut this scenario is expected to clear up in the second quarter, but the situation gets worse than expected. Have Copper Prices Bottomed Out?Ĭopper prices have dropped 27 per cent since the end of May and more than 34 per cent since the March historic hike at the start of the Russia-Ukraine war. The major central banks have begun to raise interest rates aggressively, resulting in lower GDP growth, consumer spending, and funding costs for businesses in these countries. As the USD strengthens, dollar-denominated metals become less appealing to buyers holding other currencies.Ĭopper prices are now flatly down due to the threat of a recession in developed economies, including the United States and Europe. Investors and traders added concerns that the upcoming interest rate hikes would depress global economic activity.īecause of the aggressive interest rate, the US dollar index has hit 20-year highs a stronger dollar index is putting additional pressure on Copper prices. Meanwhile, the central banks announced further increasing the interest rate in the coming days. In June, the major central banks, including the US and Europe, significantly raised interest rates, further pushing Copper prices down and weakening the demand growth. What Is Pushing Copper Prices Further Down? Other Factors Influencing Copper Prices Because of the Covid outbreak and the re-imposition of China’s strict lockdowns in the second quarter dampened the demand and import-export of Copper Base Metals. On the Demand Sideĭue to economic slowdown trends and weaker manufacturing activities globally, the demand for Copper Base Metal was lowered in major countries, especially in the top metals consumer, "China". On the other hand, last week, Vale and Antofagasta cut their 2022 Copper production outlook. MMG announced that it had suspended its Copper production targets for the year due to a 60 per cent drop in output caused by a long protest at its Las Bambas mine in Peru. All these signs point toward a potential global recession, raising a key question: Is Copper prices bottomed out or still falling? When will Coper prices stop falling and rebound? What is the outlook for Copper prices in 2022? Supply-Demand Side Headwinds In Copper Prices On the Supply Sideĭue to the increased protest in the world’s largest Copper mine (Chile and Peru) by local communities, Copper production was muted and caused supply disruption, which also impacted Copper prices. Rising Copper prices denote strong economic growth, and declining Copper prices suggest weak economic growth.Ĭopper prices have recently hit a 20-month low of Rs.610.30/KG (COMEX - 3.25 USD/lbs) in mid-July as strengthening supply-demand side challenges, slower economic activity, weaker demand outlook and a high US dollar index. Because of Copper's widespread applications in most sectors of the economy - from household applications and factories to electronics, power generation and transmission - demand for Copper is viewed as a reliable barometer of economic health. "Copper Base Metal" is often regarded as a leading indicator of the global economy. Copper prices are flatly down due to the threat of a global recession in developed economies.
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