Key points:
- Copper prices declined to a low of $4.14 due to concerns about demand in China.
- Physical demand in China is hampered by recent price surges and a prolonged property crisis, compounded by a lack of new stimulus measures.
Copper prices (Symbol: Copper-C) slid further to $4.14, reflecting market concerns over weakening demand in China, the world’s largest consumer of the base metal.
Picture: Copper prices remain suppressed, as observed on the VT Markets app.
Supply and demand determining copper prices
The drop in copper prices comes as physical demand in China has been dampened by recent price surges and ongoing issues in the property sector. The lack of new stimulus measures from last week’s political meeting has further weighed on market sentiment.
The economic challenges of China, including a protracted property crisis, have led to reduced consumption, affecting the broader market for industrial metals.
Despite the current bearish sentiment, miner Freeport-McMoRan (FCX) remains bullish on the future of copper demand. The positive outlook of the company is driven by substantial investments in the power grid, renewable energy generation technology, infrastructure, and transportation.
These sectors are expected to require significant copper usage, supporting long-term demand.
Market outlook on the orange base metal
For short-term traders, the current dip in copper prices presents potential trading opportunities. The recent downward trend suggests that there may be further volatility ahead, especially as traders react to news about China’s economic policies and global demand forecasts.
Monitoring key economic indicators from China and global infrastructure investment trends will be key for making informed trading decisions when trading copper.
Traders should also consider the potential for market corrections if new stimulus measures are introduced or if there are improvements in the property sector.
