Business

Copper price rises to $6,000

COPPER cathodes.

KALONDE NYATI, Lusaka
THE price of copper, Zambia’s main export earner, yesterday increased for a fourth day trading close to almost US$6,000 as investors poured funds into metals in expectation of inflation in China and the United States, and on signs of growing strength in the United States (US) manufacturing sector.
According to Reuters, three-month copper on the London Metal Exchange (LME) jumped 2.4 percent to US$5,877.50 a tonne by 07:42 hours GMT.
It earlier struck US$5,939 a tonne, surging towards its US$6,025.50 peak from November 11, which was its highest since June 1, 2015.
Bets that the US will raise rates in December and again next year pushed up the dollar, adding to the allure of commodities for investors seeking a hedge against inflation.
Meanwhile, China fixed its yuan midpoint at the weakest since June 2008, which also encouraged mainland investors to chase commodities as a hedge against further dollar strength amid lower yields in other asset classes and a steadily improving fundamental picture.
“Strong durable goods orders in the US helped buoy investors who have viewed Trump’s upcoming presidency as a positive for industrial metals demand,” said Australia and New Zealand Banking (ANZ) in a report.
New orders for US manufactured capital goods rebounded in October, driven by rising demand for machinery and a range of other equipment, the latest indication of acceleration in economic growth.
Similarly, the price of copper on the Shanghai Futures Exchange soared 5.4 percent to finish at 48,210 yuan (US$6,967) a tonne.
Expectations of improved demand for copper were gaining momentum, Argonaut Securities said in a report.
“Previous pessimistic concern on copper demand in China is probably overdone. Looking ahead, the prospect of improving economic conditions in China and the US will underpin a stronger copper growth in 2017 than 2016, in our view,” it said.
Demand from major consuming sectors has improved this year. Power sector demand surged 28.5 percent in the first 10 months of the year, up from 11.7 percent last year, while floor space completion, a key signal for construction demand, grew 5.7 percent year on year, up from an 8.8 percent fall last year, it noted.
China consumes about half the world’s copper.

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