Back on June 16, China announced that it wanted more control over the copper market, and would release some of its stockpiled supply for the first time in 16 years. That created an almost immediate drop in copper prices, but at the time, China did not report how much copper it would release. That forced analysts to speculate about the amount, which sent copper prices into some fluctuation over the past month.
This week, China announced that it will sell about 30,000 metric tonnes of its copper reserve by the end of July, after selling 20,000 earlier this month. Still, it is far less than the amount analysts expected. As a result, copper prices jumped more than 12 cents a pound over a four day stretch. this week.
COVID concerns around the globe is holding copper prices down, as Europe, Asia, and the United States are seeing an uptick in cases over the past three weeks. While states in the U.S. and other countries debate future restrictions, investors are concerned that the slowdown will decrease the demand over the short term. Still, compared to one year ago when restrictions were in place, the price of copper is up more than $1.20 from July 2020.
Also, supply is not keeping up with demand. As of the latest report in April, copper mining is about 75,000 metric tonnes short of demand, which was up from 13,000 metric tonnes in March.
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