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Swapping aluminum for copper will maintain China’s resources, group says
China depends on overseas imports for 60% of its aluminum resources as opposed to 70% of its copper resources.
Copper prices rose on Thursday after the US Federal Reserve signaled it may pause rate hikes.
The central bank opened the door to a pause in its aggressive tightening cycle on Wednesday after hiking interest rates by a quarter of a percentage point.
Copper for delivery in July on the Comex market in New York touched $3.90 per pound ($8,58 per tonne), up 1.5% compared to Wednesday’s closing.
[Click here for an interactive chart of copper prices]
Gains, however, were subdued as investors worried about demand in China.
The most-traded June copper contract on the Shanghai Futures Exchange closed almost flat at 66,920 yuan ($9,678.91) a tonne.
“Commodities have taken some cheer from those Fed comments, but it all seems rather muted,” said independent consultant Robin Bhar.
“There are still a lot of worries out there: when is recession coming, how deep and how long, and the China story seems to be disappointing and fading over time.”
China’s factory activity contracted in April as orders fell and poor domestic demand dragged on the sprawling manufacturing sector.
Citi analysts said they were bearish on copper and downgraded their 0-3-month price forecast to $8,000 a tonne, from $8,500 a tonne previously.
(With files from Reuters)
