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US stock markets started the month on a positive note, supported by gains in Tesla. The rise was supported by the fact that the company's profit margins remained quite good despite rising commodity prices and supply chain problems. According to the announced balance sheets, it was seen that most companies managed to pass on the increased costs to consumers and the majority earnings estimates were above expectations.
Fed, which did not change interest rates, announced that it would reduce its asset purchases by $15 billion per month as of November. Stating that Fed can be patient when it comes to an interest rate hike, Chairman Jerome Powell stated in his speech that they expect the inflation pressure to decrease as of the second half of next year. The emphasis that the inflation pressure is temporary and the dovish statement than expected had a positive effect on the US indices and the risk appetite did not broke after the decision.
Officials, who asked not to be named, said it is planned to work with the U.S. Army Corps of Engineers over the next 60 days on $4 billion worth of construction projects at coastal ports, inland waterways and other corps-appropriate facilities.
In the coming days, the focus of investors was the meeting between US President Joe Biden and Chinese President Xi Jinping. Both leaders stated that they feel responsible towards the whole world to avoid conflicts between their countries, and that at the beginning of the talks they feel responsible to avoid conflicts between the two countries. However, although the leaders signaled that the tension in Sino-US relations would ease, they did not change their stance on most issues on which they disagreed.
Towards the middle of the month, there was a decrease in risk appetite in line with the increase in covid cases and increasing inflation concerns on the European side. While the increasing number of cases caused Belgium to introduce the rule of working from home and mask, the number of cases in Germany is at the peak levels. It was noteworthy that Austria was the first western European country to impose widespread restrictions, that some parts of Germany closed non-essential businesses, as well as the introduction of remote working rules and the Netherlands' decision to close shops and bars early.
Towards the end of the month, Biden's appointment of Jerome Powell as Fed chair for the second time instead of board member Lael Brainard caused mixed movements in the indexes. Markets thought Powell was a more flexible proponent of monetary policy than Brainard, but Brainard was also appointed vice president. Powellwas seen as a step towards policy continuation at a time when concerns that the US central bank might fall behind the curve in the fight against inflation. Powell's appointment was seen as a step toward policy continuation at a time when concerns that the U.S. central bank might fall behind the curve in the fight against inflation.
On the other hand, scientists announced that the new variant detected in South Africa may escape the response of the body's immune system. Thinking that the new variant is the most effective variant ever seen and that it may be resistant to the vaccine, British authorities imposed travel restrictions to South Africa. The World Health Organization has described the new strain of covid, called Omicron, as an alarming variant, citing the possible increased risk of infection. The World Health Organization has described the new type of covid, called Omicron, as worrying.
The variant news following the full closure policy initiated by Austria caused the possibility of different countries to implement similar policies to be discussed and spoiled the risk appetite in the markets.
The British central bank (BOE), surprisingly, announced that it did not change the interest rate, which was 0.10%. After falling to the level of 1.3193 on the last day of the month against the dollar, the pound ended November at 1.3295 with a loss of 2.89% on the same day.
European Central Bank President Christine Lagarde, said that it is not possible to increase interest rates in 2022, opposing the expectations of an interest rate hike as early as next October. The Euro, which tested to the level of 1.1616 during the month, also lost value by 1.95% against the dollar in November.
On the economic data side, the US October non-farm payrolls report was followed. The data was announced as 531 thousand, above the estimates of 450 thousand, and the unemployment rate was announced as 4.6%, below the previous month and expectations.
The US October PPI index was announced as 0.6% in line with the expectations. The US consumer price index, increased 6.2% in October compared to last year. Inflation data showed consumer prices rose at the fastest pace since 1990 in October, and rising inflation boosted expectations that the Fed will tighten monetary policy.
While the Chinese CPI data came in as 1.5%, slightly above the expectations, the PPI data was announced as 13.5%, indicating that the price increases could be reflected on the consumers on the supply chain.
According to the data announced in the Euro Zone, the growth in the third quarter was 2.2% on a quarterly basis, in line with the market expectations. The annual growth rate was 3.7%.
The dollar index rose to the level of 96,938 during the month as the CPI and retail sales data, which were above the expectations. It closed the month of November at 95.994 with a increase of 1.99%.
The fact that the minutes of the Fed's meeting held on November 2-3 showed that officials could raise interest rates earlier than anticipated also supported the rise in the dollar.
Oil prices started the month down after industry data pointed to rising stockpiles of crude and distilled oil in the US, the world's largest oil consumer, and pressure on OPEC to increase production and Iran and world leaders agreed this month to resume nuclear talks. . The increasing number of covid cases in Europe also pulled prices down with demand concerns.
With the expectations that the USA, Japan and China, which want to reduce high inflation and rising energy prices, will be able to sell from their crude oil reserves, prices have dropped sharply, while brent oil and US light crude oil lost value by 16.37% and 20.81% on a monthly basis.
In November, which started cautiously with the Fed meeting, gold rose to the level of $1,850 after the Fed announced that it would not be in a hurry to raise interest rates. However, risks stemming from inflation could not stay at these levels due to the strong dollar and expectations that interest rate hikes would be realized sooner than anticipated, and the company closed the month of November with a 0.51% loss at 1.774%.
LME copper, started November with a loss amid concerns over demand in China and a premium on the dollar. Prices were bolstered by strong export growth data from China during the month, falling inventories and the adoption of the $1 trillion US infrastructure bill. China's announcement of measures to support the real estate sector also supported LME copper prices positively. However, despite the US dollar rising to a 16-month high, LME copper, which rose to $9,920 in the last days of the month, ended November with a loss of 0.97% at $9,451 with the news of the newly identified coronavirus variant in South Africa.
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International stock markets started October with sales amid concerns that high inflation might be permanent.
The general positive mood was created by Fed chairmen's statements that supply woes are putting pressure on them, but that price increases will not continue. Afterwards, Senate minority leader Republican McConnell announced that they plan to submit a proposal to raise the debt ceiling by December, supporting the indexes positively.
Deepening sales, after natural gas prices rose 40% in one day in European indices, slowed down with Putin's statements that they would increase natural gas exports to Europe and that they were ready to help balance the energy market.
Later in the month, stock markets came under the pressure of intensifying debates on whether the rise in energy prices will make inflationary temporary or long-term.
In the US indices trying to find direction, positive closings were seen with the sharing of the minutes of the FOMC meeting. The minutes showed that the authorities had increased inflation concerns and agreed to start reducing asset purchases soon. According to the minutes, if a decision is made to start reducing asset purchases next month, the decision may be implemented in mid-November or December.
Higher-than-expected company earnings relatively quelled concerns about the energy crisis and supply chain disruptions. However, Fed Chairman Powell's pointing out that inflation may remain high for longer than previously predicted pushed the markets down. Jerome Powell said the Fed should start the process of reducing its support for the economy by reducing asset purchases, but should not touch interest rates yet.
The auto industry was under pressure as chip supply problems continued to affect European auto companies. VW has announced that it will halt all production in the Czech Republic for two weeks due to the lack of semiconductors of the Skoda unit.
China's Evergrande Group transferred money to pay off the dollar-denominated bond whose coupon payment expired on September 23. If the payment, which came days before the deadline for the last payment, was not realized, the company would officially go into default.
In the last week of the month, while the rise in oil prices carried the energy sector up, Tesla's over 1 trillion USD market value was at the top of the agenda.
New concerns about the Chinese real estate sector, on the other hand, were the factor limiting gains in Asia. China's announcement that it will impose a pilot property tax in some regions has increased investors' concerns about the Chinese real estate sector.
Stock markets saw a decline, with company balance sheets clearly pointing to disruptions in the supply chain. The balance sheets showed that the largest manufacturing companies in the US, including General Motors, General Electric, 3M and Boeing, face logistical problems and higher costs due to the supply bottleneck that is expected to continue next year.
Investors, worried that inflation will strengthen due to the supply chain problems observed around the world, are watching whether the main central banks will reduce the measures to support the economy, which they put into practice during the epidemic period.
On the economic data side, unemployment data was announced as 4.8%, below the 5.1% expectation on the US side, while non-farm employment was announced as 194 thousand against the expectation of 500 thousand.
Inflation data for September were expected to increase by 0.3% and 0.2% on a monthly basis in the headline and core, respectively, while the data were announced as 0.4% and 0.2%. Consumer prices increased by 5.4% in September compared to the same month of the previous year.
The US third quarter growth data, which is expected to come in at 2.6%, was announced at the level of 2%. Third quarter personal consumption was announced at 1.6%, above the estimates of 0.9%.
In China, the September PPI data recorded the fastest increase in history due to energy restrictions and rising commodity prices, causing the pressure on businesses to increase. Producer prices rose 10.7% in September from last year, the biggest increase since the data were first released in 1996, according to data released by the Chinese statistical agency. According to the data of the institution, China's September CPI data was announced as 0.7%, below the expectations of 0.9% compared to the previous year.
China's third-quarter GDP came in at 4.9% year-on-year, below expectations of 5%. Chinese industrial production, which is expected to be 3.8% on an annual basis for September, was announced as 3.1%.
On the European side, the region's inflation was in line with the expectations of 3.4% annually and 0.5% monthly, and in line with the previous period.
The European Central Bank did not change its interest rate policy. The fact that the ECB chairman took a slight step back in his firm stance against a possible interest rate hike made investors think that interest rate increases may be in the near future.
The Bank of Canada (BoC) is ending its quantitative easing program earlier than expected and signaling that it may raise interest rates by April 2022, sooner than expected. The BoC's move also supported expectations that the Fed could act more quickly on rate hikes.
The monetary policy of the Bank of Japan (BOJ) did not change as expected.
Expectations that the Fed will tighten monetary policy sooner than expected, in addition to the anticipated rise in inflation and concerns that global economic growth will slow down, supported the dollar. On the other hand, the fact that the US industrial production data was below expectations and the increasing risk appetite put pressure on the dollar. The dollar index ended October at 94.123 with a 0.11% depreciation.
Euro/usd, recovered after falling to 1.1523, a 15-month low, and closed at 1.1561 with a loss of 0.17% on a monthly basis.
LME copper, which fell to $8,887 at the beginning of the month, later rose with the impact of Chinese investors returning from a long vacation, supported by the decline in Shanghai stocks and the resurgence of supply concerns in Peru.
The expectation that the Fed will not rush to reduce asset purchases after the below-expected US employment data continued its upward movement with the support of the positive news flow from LME Week and the rise in premiums.
While rising energy prices caused disruption in the production of downstream consumers, causing the smelter to stop production, concerns about refined copper production increased. Backwardation increased due to the tightness in the spot market.
Meanwhile, the news of the supply cut from Peru destabilized the market. LME copper stocks fell to a 23-year low and Shanghai copper stocks fell to a 14-year low, while refined copper supplies in China shrank due to power cuts.
LME copper 3-month futures price rose as high as $10,453 in the month. The gap between cash price and futures price opened to a record above $1,100, indicating that stocks are tight.
In the coming days, as the supply shortage eased and the attention was focused on the threat of slowdown in demand in the top consumer China, LME copper depreciated in value, but the high backwardation in the market continued.
In order to prevent high backwardation, the London Metal Exchange took the transactions under examination and brought temporary measures to the market.
Towards the end of the month, LME copper, which declined due to concerns that the rising dollar as well as the electricity crisis in China and slow economic growth would reduce demand, ended October at $9,544 with a monthly premium of 6.66%.
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September started with Asian stock markets falling despite Wall Street hitting an all-time high, as concerns about slowing Chinese economic growth and regulatory changes dampened risk appetite.
After the Jackson Hole symposium and the inflation data, the eyes were focused on the non-farm payrolls data, which the FED followed closely for both the timing of tapering and the rate hike. Global markets faced selling pressure after the weak data, while the US non-farm payrolls data also cast a shadow over the global growth and inflation outlook. The US non-farm employment data recorded the lowest increase in the last 7 months, remaining limited to an increase of 235k against the expectation of 733k increase.
However, markets rose on expectations that the FED will likely delay the start of reducing asset purchases after nonfarm payrolls rose more slowly than expected.
European Central Bank (ECB) did not change the policy rate in line with the expectations, it was announced that it would start to reduce its bond purchases in the next quarter. Euro Zone 2 quarter growth data was announced as 2.2%, above the 2% expectation.
The rise in oil prices towards the middle of the month reflected positively on the markets. European markets were also boosted by the reflection of the sharp rise in commodity prices, especially oil and natural gas, on sector shares.
However, China's tightening of controls on technology companies and the growing liquidity crisis of Evergrande, the country's largest construction company, made investors confused.
Concerns that the Chinese real estate company Evergrande, which is heavily indebted, would not be able to pay its debts became a featured agenda item in September. While this situation caused investors to avoid risky assets, it was watched whether the difficult situation of the company would expand to the general Chinese real estate sector. Investors feared that other companies in the Chinese real estate sector could face similar problems at a time when economic growth is fragile if Evergrande goes bankrupt or close-out.
The United Nations warned that the global economy is expected to see its fastest recovery in almost fifty years this year, but that inequality between developed and developing countries is deepening.
In line with the market expectations, the FED did not change the interest rate. It was also stated in the text that the asset purchase program could be reduced in the near future if the inflation and employment targets are approached. When we look at the median forecasts of the members, it was seen that two more members predicted an interest rate hike in 2022 compared to June. In his speech, FED Chairman Powell stated that mid-2022 might be suitable for ending asset purchases and pointed to the November meeting for tapering decision if economic data goes in line with expectations. In order to the Fed's tightening in monetary policy, it is predicted that interest rates will increase to 1% in 2023 and to 1.8% in 2024. These forecasts revealed that there would be an earlier rate hike than the FED's expectations in June.
While the dollar index started September with a flat course with the effect of economic data before the US non-farm employment data, it decreased after the employment data. However, with the depreciation of the euro before the ECB decision, the strong economic data announced in the USA and the expectations in the markets that the FED will start monetary policy tightening, it started to rise and rose to 94.503. On a monthly basis, it closed at 94.230 with a increase of 1.73%.
Against the dollar, the Euro fell 1.91% and the pound by 2.05% on a monthly basis, closing at 1.1581 and 1.3472 levels, respectively.
LME copper started September with a increase as employment data led to a depreciation in the dollar. However, prices have pulled back again as Chinese factory data raised concerns about Chinese demand.
In the coming days, copper prices also came under pressure as Chinese August imports, higher prices and sluggish economic growth hit demand.
LME copper, which rose to the level of $9,756 with the strike concerns and increasing risk appetite in Chile, could not hold on to this level as the strike disappeared and investors remained cautious before the US inflation data. Afterwards, although it turned its direction up for a short time after the data, the news flow about the expected stimulus reduction for the US economy, the uneasiness before the Fed meeting and the stronger dollar suppressed prices.
Copper tested to $8,810 on September 21, its lowest level since August 19, as the Evergrande Group debt crisis led to market sell-offs.
Although LME copper supported from Evergrande's statements that relieved the markets that it would pay its debts; September ended with a loss of 6.16% at $8,948 on the back of the power cuts in China, stronger dollar and the data that came below expectations and created demand concerns.
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May started with a rally in base metals due to rising hopes for global economic recovery, strong demand and weak dollar. LME copper, which was closed on the first trading day of the week, renewed its 10-year record in the first week of the month.
It were were effective in the sharp rise that producers stated that higher prices are needed for new investments, otherwise there will be a copper shortage in the coming years. On the other hand, copper production decreased in Chile for the 10th consecutive month.
LME copper hit an all-time record as high as $10,747.50 on May 10, after which it fell on profit-taking sales and expectation of a decline in demand in China.
At the same time, prices were supported by the threat of strikes in Chile and expectations that China will compensate for weak factory data. LME copper was on the rise again after a union representing workers at BHB's Escondida and Spence mines in Chile rejected a contract offer from the company and the threat of a strike, but failed to break the record again.
The news that China is planning to strengthen the management of both the supply and demand side in order to reduce the "irrational" increases in commodity prices was most important factor that stopped the price rise. It has been reported that China will impose serious sanctions on those who monopolize, stockpile and speculate among companies in the commodity markets.
Also, U.S. President Joe Biden delivered the first full budget proposal detailing its goals to expand the size and scope of the federal government by spending more than 6 trillion dollars in the coming fiscal year.
The dollar fell to a nine-week low after the Fed continued its pro-monetary policy easing and the White House's large-scale spending plans. End of month LME copper supported by the loss in the dolar, the workers' strike in Chile and the optimism of Biden's budget plan and ended May with %4.75 gain and $10,275 level.
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Copper prices started February to rose on expectations of further stimulus from the United States.Copper prices boosted by a weak dollar and hopes for better metals demand rose due to improved vaccine rollout and expactations of the U.S. stimulus. Copper prices underpinned by thinning inventories that pointed to higher demand for the industrial metal and by optimism over the prospect of a massive U.S. COVID-19 aid package. Before the China holiday copper prices continued to rise, scaled eight-year highs o as rising inflation expectations, a falling dollar, historically low stocks and progress in the battle against the coronavirus spurred fresh buying.
Copper took a breather on 11th Feb. as Chinese markets closed for the week-long Lunar New Year holiday after four days of rapid gains that lifted prices to their highest in eight years.
Industrial metals rose across the board in London and Shanghai on 19th Feb, with benchmark LME copper hitting a fresh nine-year high, underpinned by a weak U.S. dollar and tight supply concerns. Three-month copper on the London Metal Exchange rose to $8.995 a tonne.
London copper prices extended gains on 22th Feb to cross the $9.269 a-tonne level for the first time since August 2011, driven by a weaker dollar.
Three-month copper on the London Metal Exchange hit its highest since August 2011 of $9.617 a tonne on 25th Feb, only 5.6% below its record high level of $10.190 a tonne hit in February that year. Copper rose to a fresh 9-1/2 year high on a weaker dollar, low inventories and hopes that the metal will benefit from higher demand as major economies recover from the impact of the coronavirus.
Copper prices fell on 26th Feb., as a week-long rally in base metals ran out of steam, but the metal was on track for its best month since 2016 on low inventories and a bright demand outlook. Three-month copper contract on the London Metal Exchange closed February at $9.000 a tonne. It, however, gained 15.2% so far in February, set for its best month since November 2016.
Copper futures started to March of falls, as bleak manufacturing data from top consumer China pressured prices, while investors were cautious as they awaited a series of policy announcements. Most base metals fell on the first week of March, as a firm dollar made greenback-priced metals more expensive to holders of other currencies. LME copper edged down to $8.570 level on 4th of March.
Copper prices continued its weak course, despite of expectations of a faster economic recovery and higher capital inflows into markets after the U.S. Senate passed a long-awaited $1.9-trillion coronavirus stimulus bill. Industrial output growth in top metals consumer China accelerated faster than expected in January-February and concerns over global supply resurfaced in the middle of March. LME copper rose to $9.199,5 level on the 15th of March. But copper started to fall again with firmer dollar, as a stronger dollar made greenback-priced metals more expensive to holders of other currencies. Three-month copper on the London Metal Exchange fell 2.2% on March and closed the month to $8.809,5 level.
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Copper prices rose on the first trading day of 2021 after data showed that factory activity in top consumer China had expanded, boosting confidence in the demand outlook, as the world's second-largest economy continues to recover from the coronavirus-led slump. The Caixin/Markit Manufacturing Purchasing Managers' Index was at 53.0 in December, well above the 50-level that separates growth from contraction, but down from November's 54.9, missing expectations and easing to the softest pace in three months. London copper prices headed towards the psychological level of $8.000 a tonne on 5th of Jan., as solid manufacturing data from major economies and a stronger yuan boosted sentiment. Meanwhile, China's central bank lifted its official yuan midpoint by the most since it abandoned a decade-old peg against the dollar in 2005, boosting risk sentiment and making greenback-priced metals cheaper to holders of the yuan. Copper prices rose the first week of 2021, as investors eyed more policy support in the United States amid chances that Democrats could take over control of the crucial Senate chamber. Copper is often used as a gauge of global economic health and Democrats usually favour bigger stimulus bills. London copper prices closed the first week with %4.2 weekly rise, on hopes for more stimulus from the United States. 8th of Jan LME copper reached the $8.238 level after 8 years later.
But London copper can not be stayed above $8.200 level, industrial metals fell on 11 Jan. as top metal consumer China saw its biggest daily increase in COVID-19 cases in more than five months. Copper prices continued to fell on the second week of Jan. as a stronger dollar buoyed by stimulus hopes and higher U.S. yields made greenback-priced metals more expensive to holders of other currencies.
Copper prices in London advanced on the 18th of Jan. as top metals consumer China posted stronger-than-expected growth in the fourth quarter of 2020, boosting demand confidence.China's economy grew 6.5% in the previous quarter, faster than the 6.1% forecasts by economists in a Reuters poll, ending a rough coronavirus-striken 2020 in remarkably good shape and remained solidly poised to expand further this year. Copper edged up to $8.116 level but can not remain above $8.000. Copper prices fell again on worries that demand from top consumer China will be dampened due to the country's rising coronavirus cases that could trigger further restrictions. On the 22nd of Jan. copper tested to $7.865 level but closed the week $7.986 level.
Base metals fell on the last week of Jan., weighed by a broader sell-off in global equities and as a stronger dollar made greenback-priced metals more expensive for holders of other currencies. LME copper closed the last week of January with %2.16. Copper gained %0.76 overall in January.
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London copper prices hit their highest in more than two years on the first day of September after data showed top consumer China saw a strong expansion in manufacturing activity in August.
Three-month copper on the London Metal Exchange jumped to $6,830 a tonne. But copper eased on the second day of September from a 26-month high hit in the previous session, as the U.S. dollar firmed and comments by a Peruvian government official eased concerns over supply from world's No. 2 producer. Making greenback-traded metals more expensive to buyers using other currencies, the dollar bounced off two-year lows on solid U.S. manufacturing data. Copper fell to $6,547 a tonne after the dollar strengthened on 3d oh September. Copper is often used as a gauge of global economic health.
Datas of first week showed solid growth in China's manufacturing and services sectors, boosting hopes that the world's second biggest economy is recovering from the COVID-19 pandemic. Copper prices gained on 4th September as low inventories in exchange warehouses, disrupted ore supplies and solid economic recovery in top consumer China lent support.
LME copper fluctuated in the band $6609-$6830 between September 07-17. Notwithstanding headwinds arising from the intensifying rift between Washington and Beijing, economic stimulus measures across the world continue to support prices of copper,seen as a gauge of global economic health.The metal has gained more than 40% since March and is the best performing base metal this year so far.
"Copper looks well supported by both demand and supply," said commodity strategists at ANZ in a note. "Ample stimulus is paving the way for strong consumption, while mining disruptions are keeping supply tight." Analysts at CRU estimate Chinese demand dropped 15% in the first quarter due to COVID-19. "But there has been a strong recovery in the second quarter. We expect Chinese refined copper demand will grow 1-2% this year." "Copper should remain supported in the mid $6,000s. Much of the risk in the short term comes from non-copper specific factors, namely the dollar, further fund inflows, government stimulus measures or the progression of Covid-19."
London copper fell by the most in seven sessions on 17th September to $6,676 as the dollar climbed after the U.S. Federal Reserve said it expected the post-coronavirus recovery to gain steam in the world's largest economy. London copper hit a more than two-year high on 18th September, buoyed by a weaker dollar and strong fund buying on hopes that Chinese stimulus would spur demand in the world's biggest metals consumer. London copper gained more ground on 21th September, climbing to its highest in more than two years ($6878), as a recovery in China's industrial production underpinned prices.
The global economy appears to be recovering from the coronavirus slump faster than thought only a few months ago, thanks to improving outlooks for China and the United States, the OECD said.
Physical copper premiums in China continued to fall, losing $4.50 to $59 a tonne, data showed, extending a decline from highs of $100 six weeks ago. That was the lowest level since the start of April.
LME copper stocks available for purchase dropped by 25% on 21st September. Total LME stocks remain at levels not seen since 2005. Despite that, official prices closed lower in the last session, thanks to markets reducing risk as global coronavirus cases rise. But copper prices declined on 21th September after tested $6,878 as a strengthening U.S. dollar made greenback-priced commodities more expensive for holders of other currencies. The three-month copper on the London Metal Exchange fell to $6449 a tonne on 24th Sept. "It's the strong U.S. dollar (behind copper's price fall).
London copper edged up the last days of September as solid manufacturing and services data from top consumer China boosted optimism, but a stronger U.S. dollar capped gains. Three-month copper on the London Metal Exchange closed to September on $6,686.
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Even though copper made a weak start to the month of ay, the rest of the month also copper prices rose. London copper prices was slipped to a near two-week low on 4th of May on fears of excess supply, as some producers looked set to resume operations and demand took a hit from the coronavirus outbreak. Three-month copper on the London Metal Exchange (LME) fell to $5,060 a tonne by, its lowest since April 22.
Industrial metals prices advanced on remaining of the May on hopes for a pick up in economic activity as some U.S. states laid out plans to ease coronavirus-driven restrictions. Also Copper rose on a, buoyed by a rebound in China's demand for the manufacturing material and an unexpected rise in the country's overall exports in April.
China's April exports rose 3.5% from a year earlier, marking the first positive growth since December last year, customs data showed. China's unwrought copper imports rose 4.3% in April from the prior month, according to Reuters calculations based on customs data, boosted by an economic recovery from the coronavirus outbreak and favourable prices.
Gains in copper, however, were capped by simmering trade tensions between Washington and Beijing. Some countries have announced plans to gradually remove restrictions that were imposed to contain the coronavirus pandemic, and governments around the world have been providing stimulus programmes to support their ailing economies.
London copper boosted by expectations of better demand for metals as certain countries started to ease lockdowns put in place to curb the coronavirus pandemic. Australia, France and Spain are slowly opening their economies, while the United Kingdom - which has the second-highest virus death toll in the world - introduced some limited easing of restrictions.
Copper, used as a gauge of global economic health, has leaped 19% on the LME since March 19, when the contract hit a 45-month low, on improved demand from top consumer China, supply shortage worries and hopes for a pick up in global economy. LME copper, as demand for the red metal was still under pressure to what many describe as a long and bumpy road to recovery ahead.
Copper prices declined on week of 11-15 May as traders fretted about signs of a second wave of coronavirus infections that could add more pressure to the already-hit global economy. Copper prices extend losses after the U.S. Federal Reserve chief warned of an "extended period" of weak economic growth, sparking concerns of lean demand for the metal.
Copper prices climbed on 18th of May as the reopening of economies paralyzed by the coronavirus crisis boosted hopes of a revival in demand for metals.
Copper prices retreated from a two-month high on 21th of May as worries about the economic damage from the COVID-19 pandemic offset optimism over a potential vaccine. Three-month copper on the London Metal Exchange climbed to $5,464 a tonne. The last wee of May Copper prices fell on Wednesday as Sino-U.S. friction over Hong Kong quashed initial euphoria following the easing of lockdown restrictions in many countries. London Metal Exchange (LME) ended the May from $6,097.53 level with %3.8 monthly advantage.
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London copper started the year on a positive note after U.S. President Donald Trump set a date for signing a Phase 1 trade deal with China, top producer Chile's output fell and Beijing cut banks' reserve requirements. China's central bank (PBOC) cut the amount of cash that banks must hold as reserves, releasing about 800 billion Yuan ($114.91 billion) in funds to shore up its slowing economy. Copper prices improved further on optimism that the world's top metals consumer would also sign a phase 1 trade deal with the United States on 15th of January. London copper steadied second week of Jan., lifted by low inventories and tight supplies amid concerns about any impact from Iran's strike on U.S. forces, while a weaker dollar also supported prices. London copper continued to moved higher as most industrial metals rallied on signs that Iran and the United States were keen to de-escalate the Middle East standoff.
Washington and Beijing signed a Phase 1 trade deal on 15th January that will roll back some tariffs and boost Chinese purchases of U.S. products, defusing an 18-month row that has hurt global economic growth and metals demand. After the deal copper edged up to $6343 on 16th of Jan. But investors are worried that the pact would not substantially boost metals demand as the deal left a number of sore spots unresolved, while demand has not improved significantly to support prices. Industrial metals started to fell on 17th of Jan, pulled lower as negative sentiment spilled over from stock markets.
After person-to-person transmission of a new virus was confirmed in China oh 21st of January, and following a rating downgrade for Hong Kong. The new virus causes a type of pneumonia and belongs to the same family of coronaviruses as SARS. The deaths from the new flu-like coronavirus, started in Wuhan city in China. London copper, falling for a 12th straight session, as a jump in inventories and the spread of a flu-like virus in top metals consumer China weighed on prices. China was locked down some cities to constrain the virus, feared to spread even faster as millions of Chinese travel during their Lunar New Year holiday (started to 24th of Jan). The Chinese government, as a result, said it would extend the week-long Lunar New Year holiday by three days to Feb. 2 in a bid to slow the virus spreading. China is the world's biggest copper consumer and a major user of many other metals. Fears that the epidemic would stall economic activities have dented metals demand.
London copper recorded for their biggest monthly decline in eight months as the coronavirus epidemic raised fears of a slowdown in demand from top metals consumer China. Three-month copper on the London Metal Exchange (LME) has fallen 9.8% so far in the month, for its sharpest drop since May 2019.
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MARKET COMMENTARY
Copper prices are widely used as a gauge of economic health, which has been hurt by the prolonged trade war between the United States and China has hurt global growth outlook and demand for the red metal, as well as volatilities caused by the lengthy Brexit negotiations.
In early October, the U.S. dollar index was at its highest (99.667) since May 2017, making metals priced in the U.S. dollar including those on the LME more expensive for users of other currencies. The LME copper fell to $5588, its lowest since May 2017, on first day of October due to a stronger dollar, but trading was thin as traders in top consumer China went on a long holiday. The United States on 2nd October said it would slap 10% tariffs on European-made Airbus planes and 25% duties on French wine, Scotch and Irish whiskies, and cheese from across the continent as punishment for illegal EU aircraft subsidies. The dollar start to eased on Thursday, sliding to fresh one-week lows against the euro and yen as investor anxiety deepened over fresh signs of slowing U.S. economic growth and a broadening of global trade friction. The discount for cash copper versus three-month metal on the LME rose to $35 first week of October, the most since August last year, pointing to plentiful availability.
London copper advanced after 9th October following U.S. President Donald Trump described trade talks with China as "very good", raising hopes of breakthrough in the tariff war between the world's two biggest economies. But gains were limited as the markets remained cautious about prospects of a deal between the two biggest global economies until the second half of October. London copper rose on $5941.5 (the highest since 16th Sept.) 29th October because of worries of a supply disruption in Chile, the world's biggest producer, lent some support. But LME copper gave back soma gains because of weak China data and anxious about China-US trade deal.London copper has been closed October with gains %1.65.
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