June 23, 2021

The price of copper drops by 0.5 percent in the week

The price of copper drops by 0.5 percent in the week



The price of copper fell 0.5% this week compared to the previous one after closing this Friday at $ 2,892 per pound, reported Friday the Chilean Copper Commission (Cochilco).

According to the agency, the decline recorded at the end of this week is explained by the strong appreciation of the dollar against the euro induced by a deterioration, more than expected, of the industrial prospects of Germany, as well as the growing uncertainty derived from the Brexit process.

However, he added, Cochilco, the fundamentals of supply and demand of metal would allow to support the price in the short term.

Among these are the world copper inventories that continue to decline and the reduction of VAT in China as of April 1, together with the start of the second quarter, which usually registers an increase in the physical demand of the metal with respect to the first quarter.

Likewise, the Chuquicamata smelter of Chilean state company Codelco continues to be paralyzed, accentuating the perception of shortages and inducing a rise in the premium of high grade cathodes in the Asian market.

The inventories stored in the metal exchanges registered a weekly drop of 18,313 metric tons (MT) (-3.69%).

This, mainly due to the decline in the availability of copper refining in the holdings of the London Metal Exchange (BML), located in New Orleans (-10.950 MT) and the Shanghai Futures Exchange (-5.429 MT) .

So far this year, inventories accumulate a 36.2% increase compared to the close of 2018.

Finally, canceled warrants (securities traded on the stock exchange) in the LME recorded a weekly decrease of 23.9%, totaling 34,675 MT, which is equivalent to 19.8% of inventories in warehouses.

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