Iron ore price rises on firmer steel outlook, but trade tensions cap gains
Lower Chinese steel product inventory driven by robust exports also supported iron ore prices above $100/t.
The copper price rose on Friday on robust demand from top consumer China.
March delivery contracts were exchanging hands for $4.46 a pound ($9,812 a tonne) by midday on the Comex market in New York, up 1.6% compared to Thursday’s closing.
Copper price on the Shanghai Futures Exchange ended daytime trading 0.5% higher at 70,380 yuan ($11,043.46) a tonne. Shanghai copper benchmark has gained more than 20% this year.
Click here for an interactive chart of copper prices.
China’s factory activity unexpectedly accelerated in December, according to an official survey released on Friday, amid disruptions from covid-19 outbreaks.
“China has been a primary source of demand for base metals since 2003, but we think this trend has started to come to an end,” said Justin Smirk, senior economist at Westpac in Australia.
“With the decline of investment and production as key growth drivers, this will see diminishing incremental economic growth and a reduction in materials demand as a share of output,” he said.
“Base metals performed outstandingly well this year, which is not surprising as they effectively made up ground that was lost during 2020,” said Gavin Wendt, founding director at Mine Life Pty.
“Next year should see a continuation of overall positive demand, but with greater price volatility as the supply side recovers.”
On Thursday, Las Bambas mine in Peru, the world’s No. 2 copper producer, said it would restart operations after reaching a deal with a Peruvian community that blocked a key transport road for a month, with the process expected to take up to six days.
MMG is a unit of state-owned China Minmetals and accounts for 2% of the world’s copper supply and produced about 290,000 tonnes of copper concentrates this year. The company had already said in July that in 2021 that production at the mine was expected in the low end of its 310,00-330,000 tonnes forecast.
Read more: Top copper stories of 2021 and what to expect in 2022
(With files from Reuters and Bloomberg)
