The price of copper can’t seem to get out of its recent pattern. The ebb and flow of the red metal seems to be stuck in neutral somewhere in the mid-$2.50 a pound level.
Copper saw a small spike to open the week, thanks to China announcing new measures over the weekend to support its economy in the middle of the ongoing trade war with the United States. China’s central bank unveiled a key interest rate reform in an effort to help steer borrowing costs lower for companies. Experts think this news could potentially improve demand for the red metal.
Whatever momentum was seen Monday was quickly quieted by weak data that showed the Chinese economy continues to be hurt by the trade war with the U.S.
President Donald Trump said he was less optimistic than his aides on striking a trade deal with China, saying that while he believed China was ready to come to an agreement, “I’m not ready to make a deal yet.”
“The trade war is being reflected in the hard data, not just sentiment. Copper demand has taken a hit,” Citi analyst Oliver Nugent told Reuters. “The copper market will be balanced this year, so the macro (economic) picture will be the swing factor.”
Copper was down slightly in overnight trading and is still in the $2.50 range, but pushing closer to $2.60. Click on the chart below for up-to-the-minute pricing.
Copper futures settled at $2.544 a pound on Aug. 5, the lowest since June 2017, according to FactSet data. Prices for the metal dipped below $3 in June of 2018 as threats by the U.S. and China tariff war heated up; copper hasn’t been able to trade above that level since.
Prices have fallen 13% just since the middle of April this year.
G7 Summit Impact
Tensions are expected to be high this weekend at the Group of 7 (G7) Summit in France. Sources close to the meeting predict the G7 Summit may end without a joint communique. If that happens, it will be the first time a G7 summit ends without a communique since meetings began in 1975.
The G7 consists of the United States, France, Britain, Japan, Germany, Italy, Canada and the European Union.
We will keep an eye on the summit this weekend and see what impact it has on copper next week.
According to this Yahoo Finance article, all major miners agree that copper has a bright future. The trouble is how to get at it.2019, copper