Copper: Strikes End But Flood Damage Keeps Price Supported
Copper prices rebounded this week following a decline last week on easing supply concerns. The resolution of strikes at Freeport’s Grasberg mine in Indonesia and BHP Billiton’s Escondida mine in Chile fuelled a sell off last week as expectations of increased supply weighed on the price.
The rally comes despite a rebound in USD which managed to reverse gains this week. The latest wave of buying comes on the back of renewed expectations of Chinese demand following a report from a Chinese government think tank which suggests that the Chinese economy will grow 6.8% year on year over Q1 2017 fuelled by an uptick in production activities and investment.
While supply risks from mining strikes have receded over the past week, the impact of flooding and consequent infrastructure damage on metals shipments from Peru has caused fresh concerns. However, high levels of refined stocks alongside a surge in the secondary material have kept upside limited. However, the threat of further disruptions points to upside risks for price Indeed, In a report released this week, Goldman Sachs gave a bullish forecast for copper over 2017 which they say will come as a result of a shortage in supply as China booms again.
Read more: https://www.orbex.com/blog/2017/03/weekly-commodities-wrap-flood-damage-keeps-copper-supported/