LONDON – Sluggish economic growth and demand in top consumer China is expected to sustain the headwinds facing copper demand and prices that have struggled to maintain the momentum of earlier this year.
Benchmark copper on the London Metal Exchange (LME) hit a seven-month high of $9,550.50 a ton in January after China removed its strict COVID curbs, but prices of the metal used in power and construction have since retreated to less than $9,000 a ton.
“The bullish scenario that markets appeared to be pricing in during early January, is looking increasingly less likely to materialize, with Chinese indicators pointing to a mixed recovery,” said Macquarie analyst Alice Fox.
The lagged effects of monetary policy in Europe and a “cyclically challenging” outlook in the United States have also undermined copper prices, she added.
Around the world, surveys of manufacturing purchasing managers suggest weak demand for industrial metals.
China’s Caixin/S&P manufacturing PMI fell to 50.0 in March, down from 51.6 in February.
The new export orders sub-index – a gauge of demand – fell to 49.0 after briefly swinging above 50 in February. – Reuters
