“Copper demand is picking up in China and the mining side of things has not performed so well this year. We’re getting some really strong signals from fabricators about demand from the power sector,” Vivienne Lloyd, metals analyst at Macquarie, said in a Reuters article.
Additionally, the depreciating U.S. dollar also helped bolster commodities prices – a weak greenback makes it cheaper for foreign buyers, like China, to acquire USD-denominated commodities. The USD was head for its largest decline in 10 weeks against a basket of 10 currencies on speculation that the Federal Reserve could push off a rate hike due to weakening economic data.
“There is no consistency in the data, and more and more people are beginning to believe that the Fed may hold rates at this level longer than earlier estimated,” Meger added. “The dollar’s weakness is definitely helping metals.”
First Trust ISE Global Copper Index Fund
For more information on the copper market, visit our copper category.
Max Chen contributed to this article.