tED magazine is continuing to track the price of copper as uncertainty continues. We will remain committed to bringing our readers and the association the latest information possible. Beginning in early April, we will begin a weekly column at www.tedmag.com that talks with experts on copper futures to keep you up to date on this situation.
Copper prices dropped slightly on Wednesday, but rebounded overnight, as worries and uncertainty about China’s economic future remain. It closed Wednesday on the Comex division of the New York Mercantile Exchange at $2.965, a drop of 1.3% fromTuesday.
Bill O”Neill of LOGIC Advisors told the Wall Street Journal that he sees the copper market as “sluggish” based on the Chinese economy, which he considers the most important factor in the price of copper.
Copper prices dropped dramatically at the beginning of March, falling below $3 a pound for the first time in years. China accounts for about 40% of the world’s copper use, and the weakening economy there has led to a decrease in purchases.
On Monday, China released its factory activity data, and it showed continuing weakness. That led to speculation that the price of copper may have bottomed out, and Tuesday prices rose above $3 a pound. There are also reports that demand for copper is starting to pick up when compared with the demand in early March. The strongest indicator on the price of copper should come next week, when official Chinese manufacturing figures will be released. They are expected to show the slowing economic growth, and another dip in prices.
However, Barclays released a paper on Wednesday suggesting the price of copper is on the rise again.
“The extent of the decline in copper prices is overdone since micro trends have likely bottomed, though macro concerns and stock overhang take some of the potential upside off our Q2 price forecast,” the note said. “We think risk/reward of buying copper at these lows is attractive.”
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