The term “Dr Copper” is sometimes applied to the copper price to describe the red metal’s purported omniscience in predicting changes in the state of the world economy. In the industrial industry, copper is frequently utilized in machinery, finished goods, and intermediate items like pipes and tubes. Copper is utilized in the installation, energy, and telecommunications industries because it is a good conductor of heat and electricity. In the meantime, it is extensively employed as a good heat conductor in the transport equipment business.
Copper miners bear the whole risk (and reward) of changing copper prices. When a lot of copper ore is available, treatment and refining costs increase. Thus, it is clear that lower copper prices brought on by an increase in ore supply may be offset by increased treatment and refining costs.
Due to a weaker currency and anticipated increased demand from major user China, copper increased on Friday and was on track to post a weekly gain. However, persistent worries about a global recession dampened investor optimism and limited gains.
The price of three-month copper on the London Metal Exchange increased by 0.9% to $9,384.50 a tonne, bringing its gains for this week to 2.2% and for the entire month to 12.8%. On the Shanghai Futures Exchange, the most active March copper contract closed at 70,420 yuan ($10,399.47) a tonne, up 2.3% for the week.
Fears Of A Copper Recession Linger
After the Chinese New Year, investors anticipated a significant rebound in physical demand. The dollar index was hovering near a seven-month low. Making the commodity priced in dollars more appealing to holders of other currencies.
According to Zerlina Zeng, a senior research analyst at Fitch Solutions, “for now, onshore physicals are soft, copper demand is still 10% down year over year, and import arbitrage is negative.”
Onshore traders, however, are becoming more optimistic about China’s macroeconomic prospects. Which helped maintain the reasonably strong copper import flows based on imports cleared through Shanghai.
Due to the Lunar New Year holidays, the exchange will remain closed for trade on Friday night and the following week. The strong smelter production this month and the still-weak consumption. According to CITIC Futures, might lead to a higher-than-normal buildup of stockpiles over the holiday, up to 300,000 tonnes.
Among other metals, LME aluminum increased by 1.2% to $2,618.50. Zinc decreased by 0.6% to $3,438. Tin increased by 1.7% to $29,300. Lead decreased by 0.2% to $2,138 per tonne.
Aluminum increased by 2.1% to 19,465 yuan. Lead decreased by 0.7% to 15,190 yuan. Zinc increased by 1.6% to 24,765 yuan, and tin increased by 3.8% to 238,960 yuan a tonne on the SHFE. Nickel increased by 5.5% to 223,130 yuan a tonne.