Copper price rebounds on optimism over US debt talks
The copper price rebounded on Friday on hopes that US politicians will seal a deal to avert a debt default.
Copper for delivery in July was up 2.1% on the Comex market in New York, touching $3.76 per pound ($8,272 per tonne).
Click here for an interactive chart of copper prices
Wider financial markets marched higher after Democratic negotiators told President Joe Biden on Friday that they are making “steady progress” in talks with Republicans in an effort to avoid a US default.
“We’ve seen this so many times; both sides of the aisle show some brinkmanship, but then come together for a deal,” said WisdomTree commodity strategist Nitesh Shah.
“A lot of cyclical assets are moving one day up, one day down, dependent on what’s going on with the debt situation. Markets are nervous, there’s a high risk of an accident.”
The copper market, however, faces headwinds in the coming weeks, with weak demand in China and potential recession in the United States and Europe, analysts said.
“Along with weak Chinese demand, a strong US dollar on the back of robust US economic data and hawkish comments from the Fed have placed a cap on copper and commodity prices in general,” said Sabrin Chowdhury, head of commodities at BMI.
The outlook for industrial metals remains weak in 2023, Chowdhury said, highlighting that the China recovery is largely being led by services rather than the manufacturing and construction sectors that have historically driven economic growth in the country.
(With files from Reuters)