MARKET COMMENTARY
Copper prices rose on the first trading day of 2021 after data showed that factory activity in top consumer China had expanded, boosting confidence in the demand outlook, as the world's second-largest economy continues to recover from the coronavirus-led slump. The Caixin/Markit Manufacturing Purchasing Managers' Index was at 53.0 in December, well above the 50-level that separates growth from contraction, but down from November's 54.9, missing expectations and easing to the softest pace in three months. London copper prices headed towards the psychological level of $8.000 a tonne on 5th of Jan., as solid manufacturing data from major economies and a stronger yuan boosted sentiment. Meanwhile, China's central bank lifted its official yuan midpoint by the most since it abandoned a decade-old peg against the dollar in 2005, boosting risk sentiment and making greenback-priced metals cheaper to holders of the yuan. Copper prices rose the first week of 2021, as investors eyed more policy support in the United States amid chances that Democrats could take over control of the crucial Senate chamber. Copper is often used as a gauge of global economic health and Democrats usually favour bigger stimulus bills. London copper prices closed the first week with %4.2 weekly rise, on hopes for more stimulus from the United States. 8th of Jan LME copper reached the $8.238 level after 8 years later.
But London copper can not be stayed above $8.200 level, industrial metals fell on 11 Jan. as top metal consumer China saw its biggest daily increase in COVID-19 cases in more than five months. Copper prices continued to fell on the second week of Jan. as a stronger dollar buoyed by stimulus hopes and higher U.S. yields made greenback-priced metals more expensive to holders of other currencies.
Copper prices in London advanced on the 18th of Jan. as top metals consumer China posted stronger-than-expected growth in the fourth quarter of 2020, boosting demand confidence.China's economy grew 6.5% in the previous quarter, faster than the 6.1% forecasts by economists in a Reuters poll, ending a rough coronavirus-striken 2020 in remarkably good shape and remained solidly poised to expand further this year. Copper edged up to $8.116 level but can not remain above $8.000. Copper prices fell again on worries that demand from top consumer China will be dampened due to the country's rising coronavirus cases that could trigger further restrictions. On the 22nd of Jan. copper tested to $7.865 level but closed the week $7.986 level.
Base metals fell on the last week of Jan., weighed by a broader sell-off in global equities and as a stronger dollar made greenback-priced metals more expensive for holders of other currencies. LME copper closed the last week of January with %2.16. Copper gained %0.76 overall in January.