China is the world’s largest copper consumer and with the coronavirus spreading throughout the world’s second-largest economy, it’s not surprising that the red metal’s prices are faltering.
The United States Copper Index Fund (NYSEARCA: CPER) and the iPath Series B Bloomberg Copper Subindex Total Return ETN (NYSEArca: JJC) has recently been sliding, too. Over the past week, JJC is lower by nearly 9%.
“The copper price fell sharply again on Monday as China, responsible for more than 50% of the world’s copper consumption, struggles to control the deadly coronavirus outbreak,” reports Frik Els for Mining.com. “Eight consecutive down days in New York saw copper for delivery in March losing 10.2% in value, falling to a more than 3-month low of $2.592 a pound ($5,715 a tonne) on the Comex market in New York. On the LME, copper suffered its longest losing streak in six years.”
Copper Quagmire
In addition to trade tensions last year, copper prices slipped on softening global economic data. The base metal is a major component in many industries, including construction, and is widely seen as a barometer for global economic health.
However, dueling views of the industrial metal remain in place. Some analysts are growing concerned that global troubles could drag down the industrial metal as well. Along with the trade concerns, copper prices were weakening on softening global economic data. The base metal is a significant component in many industries, including construction, and is widely seen as a barometer for global economic health.
Some analysts are growing concerned that global troubles could drag down the industrial metal as well. Along with the trade concerns, copper prices were weakening on softening global economic data. The base metal is a significant component in many industries, including construction, and is widely seen as a barometer for global economic health.
“BMO Capital said in a research note that the Beijing’s response to the outbreak, assuming it can be brought under control, could be significant,” according to Mining.com. “The investment bank believes the Chinese government ~6% growth target for 2019 ‘is likely non-negotiable in order to meet the doubling of per capita GDP promised by President Xi in 2020 versus 2010.’”
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.
