The Globe and Mail reports in its Tuesday, Nov. 22, edition that climbing inventories because of slowing demand and mounting mine supply are set to hit copper prices over coming months. A Reuters dispatch to The Globe reports that demand optimism kindled by top consumer China easing some COVID restrictions has faded as cases have risen and new curbs have been imposed, which will further undermine industrial activity.
A lower U.S. currency, which makes dollar-priced metals cheaper for holders of other currencies, provided a boost, but that trend too seems to have stalled because of hawkish comments on U.S. interest rates from Federal Reserve officials.
Benchmark copper on the London Metal Exchange rose 20 per cent between Sept. 28 and Nov. 14 to $8,600 (U.S.) a tonne, but has since retreated.
Further pressure on copper prices will come from a jump in mined production -- about 8 per cent to about 24 million tonnes next year, compared with a rise of only 1.8 per cent this year, according to Macquarie analysts.
That will be compounded by a further slowdown in industrial activity, as highlighted in surveys of purchasing managers in China's manufacturing sector showing contraction.
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