Copper Price Surges to Two-Year High On Booming Chinese Economy
- The price of copper has reached its highest level since May 2015 on hopes of a pickup in demand from China.
- The world’s second-largest economy is set toban imports of some scrap metal, including copper, from the end of next year.
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The price of copper has forged ahead to its highest level since May 2015 on strong economic growth in China – the world’s largest importer of the metal – and reports that China may ban imports of some scrap metal, including copper, from the end of 2018.
Chart: Copper Price Weekly Timeframe (April 2015 to July 26, 2017)
Data released last week showed that Chinese GDP held at a hefty 6.9% year/year in the second quarter of 2017, that retail sales grew by 11.0% year/year in June from 10.7% and that industrial production increased by 7.6% year/year last month from 6.5%. All were above economists’ median forecasts.
As for the future, China’s GDP will expand by 6.7% from a year ago in the third quarter and 6.6% in the fourth quarter, according to the median of 57 economists’ estimates in a July 17-24 Bloomberg survey. Both forecasts were 0.1 percentage point higher than a month ago.
Moreover, a report from the Conference Board showed an unexpected improvement in consumer confidence in July and Reuters reported that the recycling branch of the China Non-Ferrous Metals Industry Association said Tuesday that it had received a notice that at the end of 2018 imports of scrap metal, including copper, will be prohibited. In response, the copper price has now risen for five successive sessions.
Chart: Copper Price Daily Timeframe (April 3, 2017 to July 26, 2017)
--- Written by Martin Essex, Analyst and Editor
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.