Copper Gets A Pick-Me-Up
Copper prices are up slightly in London, as the dollar— which has been showing some strength recently— stumbled. Three-month copper climbed 1.1 percent on Thursday to sit at $7,279 per tonne. Copper was seeing resistance at the $7.240 per tonne, but the day's climb seems to have broken that barrier. Over in New York, copper futures were behaving much the same. Copper for July was up 0.9 percent at $3.2945 a pound.
Also giving the red metal a pick-me-up was data from Japan showing an expansion of 3.5 percent for its economy, beating analyst's forecasts of 2.8 percent growth. With its economy expanding, Japan is also expected to boost its copper demand, the Wall Street Journal reported.
It seems that the Chinese yuan will have a limited near-term affect on China's copper imports, Platts reported.
"In theory, the appreciation of yuan should stimulate copper imports. But based on the current market fundamentals, we see very limited positive impact in the near term," He Xiaohui, a copper analyst with state-owned metals consultancy Beijing Antaike, told Platts. Xiaohui went on to say that there is currently a destocking of the excess of domestic inventories, which has created the need to offset imports.Caveat emptor On a cautionary note to copper investors, Shanghai Cifco Futures Co released a technical analysis of the copper market that doesn't bode well for the red metal. According to the firm, copper looks to be heading for a 16 percent drop by the end of September — its lowest level in three years — as it completes the final leg of its journey through the Elliott Wave. Bloomberg reported that copper is currently on the rebound, on the back of its third bearish cycle from February to April. The firm expects prices to climb until the end of June before pulling back to $6,037.50 per tonne.
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