Sunday, April 28, 2024

Vogon Today

Selected News from the Galaxy

StartMag

Because copper and iron ore prices are soaring

3 years ago babelfish

Because copper and iron ore prices are soaring

New records for copper and iron ore prices. The facts analyzed by Torlizzi, general manager of T-Commodity

10,260.50 dollars a ton: at the London metal exchange, copper exceeds the previous record set in February 2011. Excellent performance also for ferrous minerals, which have reached their highest level since 2008.

And the bullish course, also pushed by a not very strong dollar, now seems to be marked.

THE PRICES OF COPPER

Copper continues to trade over $ 10,000 per ton on the London Metal Exchange (Lme). The red metal also hit the $ 10,260.50 per ton mark, surpassing the previous high, set in February 2011, and marking a real rally after the cost per ton hit its low of $ 4,371.

THE RECORD OF FERROUS MINERALS

The price of ferrous minerals also increased, reaching $ 202.65, the highest since 2008 according to the reference index drawn up by S&P Platts.

THE REASONS FOR THE RALLY

The rally was due to strong demand, especially from China. The Land of the Dragon, in fact, absorbs half of world production and after a few days of pause after May 1st, demand has had a strong recovery.

The weak dollar also affects the price of metals, which has lost about 0.5% of its value against a basket of currencies in the last three sessions.

WHAT HAPPENS IN CHILE

In the face of a growing demand, there is a decreasing supply. As stated in Energia Oltre , in Chile, the world's largest producer of copper, output fell for the tenth consecutive month. During the month, according to the Instituto Nacional de Estadísticas (INE), copper production decreased by 1.3 percent to 491,720 tons.

THE HYPOTHESIS OF BANK OF AMERICA

All these factors will lead the cost of copper, a raw material used in countless industrial products, to rise to $ 13,000, according to Bank of America.

A TREND (STILL) UP

Ji Xianfei, of Guotai Junan Futures, also argues that the race continues: “It is difficult to predict that copper prices will reverse the current bullish atmosphere”.

“The long-term outlook for metal prices is too good and points to higher prices in the coming years,” remarks Daniel Briesemann of Commerzbank AG. On the other hand, the drive towards decarbonisation and the electrification of the automotive sector will further increase demand.

THE MOVES OF CHINA

Not just the law of the market. To influence the prices of raw materials, notes on Twitter Gianclaudio Torlizzi, former editor-in-chief at Dow Jones, now general manager of T-Commodity, a financial consulting firm, is also the "decision by the Chinese government to indefinitely suspend all activities related to the 'China-Australia Strategic economic dialogue mechanism' ".

Torlizzi to Start adds: “Copper benefits from a combination of factors: on the one hand, strong Chinese demand. Beijing is exploiting the pandemic to affirm the status of the world's leading economy and to finance this dynamic it requires large quantities of raw materials. On the other hand, the very aggressive monetary stimulus policy of the Federal Reserve contributes, regardless of the growing inflationary pressures. In the midst of exacerbating the pressure on prices comes the EU which on certain types of materials such as steel maintains the safeguard measures that discourage imports ".

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/perche-i-prezzi-di-rame-e-minerali-ferrosi-stanno-schizzando/ on Fri, 07 May 2021 13:13:35 +0000.