MARKET COMMENTARY
3M LME copper fell to $8127 on February 9, as US speculators predicted a decline in February despite reports that China was supporting its economy with financing measures. It rose to $8608.5 on Feb. 22, supported by a weakening dollar and hopes for a strong demand outlook in China, a leading metal consumer, following Beijing's efforts to stimulate its economy and real estate sector. This increase was not enough to compensate for its losses and it completed February with a loss of 1.59% at $8478.5.
In the copper market, which is guided by China and the dollar, the slowdown in demand before China's New Year holiday put pressure on the price again. LME copper increased its losses on February 9, falling to $8127, as US speculators made bearish predictions despite the news that China was supporting its economy with financing measures. It closed the 6th week with a 3.25% depreciation at $8189.
3M LME copper traded volume was low for the 7th week due to public holiday in China. Copper prices faced losses at the beginning of the 7th week under the pressure of the strengthening dollar after higher than expected inflation data in the USA and the Fed reducing the expectations for an early interest rate cut. Copper prices completed the week at $8472 with a 3.46% gain, as weaker than expected retail sales data in the US revived hopes that the Fed would cut interest rates in June and increased investors' risk appetite.
Copper prices rose to $8608.5 for the 8th week, supported by a weak dollar and hopes for a strong demand outlook in China, a leading consumer of the metal, following Beijing's efforts to stimulate its economy and real estate sector. Copper prices closed the 8th week with a 1.03% gain at $8559, on the back of a weak dollar and renewed hopes for a strong demand outlook in China, the leading metal consumer.
Indonesia, the world's top nickel producer, is currently reviewing applications from miners to grant mining quota approval for the next three years. The uncertainty in this process caused Nickel prices to increase by 7.03% in the 8th week.
3M LME copper gained ground at the start of the 9th week this week on hopes that the annual parliament meeting in top consumer China will pave the way for more economic stimulus. 3M LME copper fell to $8427, remaining in a narrow range, as increases in inventories in Chinese warehouses offset tightness in mining supply. 3M LME copper extended its losses due to the strong dollar and bad news from the real estate sector of China, a large consumer of industrial metals. China's Country Garden said on Feb. 28 that a liquidation petition had been filed, undermining Beijing's efforts to restore confidence in the real estate sector, which accounts for a quarter of China's GDP. Although 3M LME copper had difficulty finding direction towards the end of the week with the PCE index being announced in the USA in line with the predictions, it completed the 9th week with a loss of 0.43% at $8522.
