Daily Management Review

Copper prices keep falling after news from Chile


10/16/2019


Copper is getting cheaper due to news from Chile: Antofagasta, one of the largest in the world, managed to prevent a strike of workers at the copper deposits demanding better wage conditions.



pixabay
pixabay
The quotes are also pressured by the weakening economic growth of the global economy. Earlier, the IMF lowered its forecasts for world GDP growth for 2019 and 2020 by 0.2 and 0.1 percentage points, to 3% and 3.4%. Earlier, the World Bank lowered the forecast as well.

On October 4, copper was trading near a two-year low of $ 5635 per ton.

Data released this month indicates a deterioration in global manufacturing activity due to the roar of a trade war between the US and China. “Most of the copper price dynamics this year was driven by deterioration in global sentiment,” said Richard Knights, an analyst with Liberum, a London-based brokerage firm.

Data published at that time showed that manufacturing activity in the US in September fell to more than a 10-year low, while in the Eurozone the sector contracted the most in almost seven years.

Copper is used in almost all construction projects and household appliances. This is one of the indicators for investors.

According to Citigroup estimates, demand for copper will grow by only 0.2% in 2019 due to lower electricity costs and lower car sales.

Since US President Donald Trump began his trade dispute with China last June, copper prices have fallen by more than 20%.

"Copper has gone through the worst year of 2019 compared to other base metals," said Nick Snowdon, an analyst with Deutsche Bank. According to him, a global reduction in copper production by 2% per year would lead to a stable increase in prices. 

source: ft.com






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