MARKET COMMENTARY
Copper prices started February to rose on expectations of further stimulus from the United States.Copper prices boosted by a weak dollar and hopes for better metals demand rose due to improved vaccine rollout and expactations of the U.S. stimulus. Copper prices underpinned by thinning inventories that pointed to higher demand for the industrial metal and by optimism over the prospect of a massive U.S. COVID-19 aid package. Before the China holiday copper prices continued to rise, scaled eight-year highs o as rising inflation expectations, a falling dollar, historically low stocks and progress in the battle against the coronavirus spurred fresh buying.
Copper took a breather on 11th Feb. as Chinese markets closed for the week-long Lunar New Year holiday after four days of rapid gains that lifted prices to their highest in eight years.
Industrial metals rose across the board in London and Shanghai on 19th Feb, with benchmark LME copper hitting a fresh nine-year high, underpinned by a weak U.S. dollar and tight supply concerns. Three-month copper on the London Metal Exchange rose to $8.995 a tonne.
London copper prices extended gains on 22th Feb to cross the $9.269 a-tonne level for the first time since August 2011, driven by a weaker dollar.
Three-month copper on the London Metal Exchange hit its highest since August 2011 of $9.617 a tonne on 25th Feb, only 5.6% below its record high level of $10.190 a tonne hit in February that year. Copper rose to a fresh 9-1/2 year high on a weaker dollar, low inventories and hopes that the metal will benefit from higher demand as major economies recover from the impact of the coronavirus.
Copper prices fell on 26th Feb., as a week-long rally in base metals ran out of steam, but the metal was on track for its best month since 2016 on low inventories and a bright demand outlook. Three-month copper contract on the London Metal Exchange closed February at $9.000 a tonne. It, however, gained 15.2% so far in February, set for its best month since November 2016.
Copper futures started to March of falls, as bleak manufacturing data from top consumer China pressured prices, while investors were cautious as they awaited a series of policy announcements. Most base metals fell on the first week of March, as a firm dollar made greenback-priced metals more expensive to holders of other currencies. LME copper edged down to $8.570 level on 4th of March.
Copper prices continued its weak course, despite of expectations of a faster economic recovery and higher capital inflows into markets after the U.S. Senate passed a long-awaited $1.9-trillion coronavirus stimulus bill. Industrial output growth in top metals consumer China accelerated faster than expected in January-February and concerns over global supply resurfaced in the middle of March. LME copper rose to $9.199,5 level on the 15th of March. But copper started to fall again with firmer dollar, as a stronger dollar made greenback-priced metals more expensive to holders of other currencies. Three-month copper on the London Metal Exchange fell 2.2% on March and closed the month to $8.809,5 level.