TRYNESS TEMBO, Lusaka
THE COPPER price on the international market yesterday hit its highest in three years to trade at a near US$7,000 a tonne, as investment flowed into industrial metals, amid surprising robust global factory growth.
The commodity, which is Zambia’s major source of foreign exchange, has witnessed an upsurge the past few months.
Reuters reports that factories across Asia and Europe cranked up production last month as global demand remained strong, confounding expectations that growth may have peaked.
“According to London Metal Exchange, copper was up 0.7 percentage point at US$6,884 a tonne, extending a 0.7 percentage point advance from the previous session. Earlier in the session, prices struck US$6,920.25 a tonne, their highest since September 2014. Prices are now on track for their biggest annual advance since 2010, up 24 percent,” Reuters reports.
Commenting on the development, Commonwealth Bank Australia in Melbourne associate director Vivek Dhar said Chinese demand has been more than what the market generally expected, but it is not guns-blazing amazing, which means that supply is playing a key role here.
“There is latent capacity that could be brought on line but no-one is doing it so I think we are likely to have prices at least supported around current levels into the fourth quarter. I think we will get more clarity after China’s Congress in mid-October,” Mr Dhar said.
On the local money market, Bank of Zambia (BoZ) treasury bills were oversubscribed on Friday, attracting bids of over K1.6 billion, against an offer of K1 billion.
Zanaco says of the total bids, almost K1.5 billion was allocated.
The bank in its daily treasury newsletter said yield rates generally dropped except the five-year rate that marginally went up to 17.65 percent from 17.47 percent.
Yield commonly refers to the dividend, interest or return the investor receives from a security like a stock or bond, and is usually reported as an annual figure.
“The government bonds auction was oversubscribed, receiving bids amounting to K1,599.76 million, and a total of K1,451.34 million was allocated,” the statement reads.