London Metal Exchange copper cash prices rose to US$6,789 per tonne on Sept. 1, the highest level since June 2018, 5.4% higher than the US$6,441/t level on Aug. 3. The price rally is strongly linked to U.S. dollar weakness and the continued ramp-up of Chinese refined copper consumption. As a result, we have increased our forecast for the copper price for 2020.
- Copper prices have increased by 5.4% to US$6,789/t on Sept. 1 from US$6,441/t a month earlier, a 26-month high.
- The trade-weighted dollar fell to a 28-month low of 92.14 on Aug. 31 as the U.S. presidential election approaches, with Democratic Party candidate Joe Biden the front runner in the polls.
- The Chinese Caixin Purchasing Managers Indexes, or PMI, rose to 53.1 in August from 52.8 in July.
- Chinese fixed-asset investment fell for the sixth consecutive month, declining by just 1.6% in August, down from a 3.1% fall in July.
- China imported 521,291 tonnes of refined copper during the first seven months of 2020, 21% higher than the 431,909 tonnes imported during the same period of 2019.
- We have maintained our view that copper prices will continue to rise in the very near term before easing back during the fourth quarter.