x Abu Dhabi, UAESaturday 22 July 2017

Weekly copper price buffs up a treat for now

What's Up: Copper had its best week since late February last week as positive US earnings and easing concerns about the euro zone helped lift the base metal.

London Metal Exchange three-month copper rose by $140 to finish at $8,192 a tonne. Carlos Barria / Reuters
London Metal Exchange three-month copper rose by $140 to finish at $8,192 a tonne. Carlos Barria / Reuters

The price of copper has see-sawed in sync with global equities this year.

As optimism builds about the economy, investors have snapped up the base metal. After all, a brighter outlook should mean more demand for copper in building and technology.

But nagging doubts about the euro zone or cooling growth in India and China have often returned to check copper's rise.

Last week, however, was a positive one for copper. Strong first-quarter earnings in the United States and fading concerns about the euro zone helped the commodity post its best weekly performance for nearly two months. London Metal Exchange three-month copper rose US$140 to finish at $8,192 a tonne, almost 4 per cent higher than the start of the week.

Still, analysts urge caution.

"The Spanish issue is still a big concern to the market. And demand from China has been very slow, so I wouldn't get too excited about the upside," Edward Meir, an analyst at INTL FCStone, was quoted as saying by Reuters after the latest rally.

Worries that, after tripling in value over the past decade, copper prices may fall away in the near term could prompt some companies to consider selling assets in the metal, say analysts.

But amid the uncertainty, some are spying opportunities.

OZ Minerals, an Australian miner, is reportedly hunting for copper and gold mining assets in Chile and Peru. Middle East investors also appear positive.

The Dubai Gold and Commodities Exchange announced last week the launch of the region's first copper futures market.

Large construction and infrastructure projects in the pipeline across the Middle East meant strong regional appetite was forecast for copper in the future, said the exchange.

"The introduction of the new contract is the result of both these favourable market conditions and a high demand from market participants," said Ahmed bin Sulayem, the chairman of the exchange.

tarnold@thenational.ae

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