Copper dropped to a seven-month low on Tuesday amid fears that a planned bailout of Cyprus' banks could lead to a run on banks across Europe. Cyprus rejected the terms of the bailout and the fate of its banks remains uncertain, weighing on the euro. But, helped by HSBC data that shows the Chinese manufacturing sector grew modestly in March — and by a three-year high in US home sales — the red metal recovered some of the losses it made earlier in the week.
“It shows that economic activity in China has picked up after the new year holiday and we expect to see improved economic figures in coming months lending support to prices,” Commerzbank analyst Daniel Briesemann
Meanwhile, the International Copper Study Group
Thursday that the refined copper market balance for December shows a production surplus of around 170,000 metric tons (MT).
Also this week, Australia's Bureau of Resources and Energy Economics said in its quarterly resources and energy report that a copper surplus — caused by recently commissioned mines in Indonesia, Peru and Mongolia that will ramp up to full production this year — will result in the average copper price declining 4 percent, to around $7,778 per MT, in 2013. It expects the price to continue dropping to $6,900 per MT in 2016, recovering to $7,100 per MT in 2018.
On the London Metal Exchange, copper for three-month delivery closed down 0.4 percent, at $7,590 per MT. That's down from $7,620 on Wednesday, but higher than Tuesday's seven-month low of $7,486.25 per MT. COMEX copper for May delivery was down 0.2 percent, at $3.44 per pound, in mid-afternoon trade in New York.