During the week that ended on Oct 30, copper prices weakened. The second wave of the COVID-19 in Europe and the US has prolonged the ongoing economic recession. The uncertainty regarding the lockdown measures alerted investors in commodities and reduced the outlook for the demand for copper. The US and Europe constitute 24pc of annual copper production.
The National Institute of Statistics (INE) of Chile, a country that is a major producer of copper, reported that the September production stood at 484,768mt, down by 0.8pc to prior-year period. Meanwhile, the production in January-September was 3.30mn mt, an increase of 0.5pc from the prior-year period.
The good growth indicators of China in Sept quarter created demand for copper and reduced the inventories in the metal exchanges.
The three-month copper prices on LME dropped by $118.5/mt to $6,706/mt on Oct 30 from $6,824.5/mt on Oct 26. Multiple factors weighed on the copper prices in the week that ended on Oct 30. Appreciation of the US dollar, postponement of a new economic stimulus plan in the US and rising COVID-19 infections in Europe and the USA had its bearing on copper prices.
In the earlier week that ended on Oct 23, the three-month copper prices rose to $6,953/mt on Oct 21.
Chilean Copper Commission (Cochilco) shared that Europe began to apply restrictions on movements and commercial activities. Germany, Spain, Italy and France got affected by the second wave of the COVID-19 infections. Cochilco added that this has increased the unpredictability of future developments and pushed the price of USD and weakened the price of copper.