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Copper Prices Rise Amid Economic Recovery

Strategic Insights

— 1 min read

The US economy's growth in the fourth quarter helped copper prices maintain their gains despite concerns over unrest in Egypt, which pressured the stock market. The most actively traded copper contract for March delivery rose 3.45 cents, or 0.8%, to settle at $4.3730 a pound on the Comex division of the New York Mercantile Exchange. The growth in the US economy, with a 3.2% inflation-adjusted annual rate in the fourth quarter, was the highest level since the end of 2007, when the recession started.

Key Takeaways:

  • Copper prices rose 3.45 cents, or 0.8%, to settle at $4.3730 a pound on the Comex division of the New York Mercantile Exchange, driven by the US economy's growth in the fourth quarter.
  • The US economy's growth rate of 3.2% in the fourth quarter was the highest level since the end of 2007, taking total output to its highest level since the start of the recession.
  • Demand for copper is expected to outstrip supply this year as the global economic recovery gains steam, according to George Gero, vice president with RBC Capital Markets Global Futures.
  • Copper prices are highly sensitive to economic data due to the metal's wide use in buildings, electronics, and appliances.
  • Inventories of copper stored in London Metal Exchange warehouses rose 800 metric tons, while once-a-week data from the Shanghai Futures Exchange showed a weekly decline of 1,114 metric tons.
  • The growth in the US economy helped copper shrug off a tumble in US stocks, as the Dow Jones Industrial Average was down 1.3% shortly after copper settled.

Statistics:

  • Copper prices rose 3.45 cents, or 0.8%, to settle at $4.3730 a pound on Comex.
  • The US economy's growth rate in the fourth quarter was 3.2% in inflation-adjusted annual rate.
  • Inventories of copper stored in London Metal Exchange warehouses rose 800 metric tons to 398,075.
  • Once-a-week data from the Shanghai Futures Exchange showed a weekly decline of 1,114 metric tons to 129,250.
  • The Dow Jones Industrial Average fell 1.3% shortly after copper settled.

Sources:

  • Dow Jones Commodities News (Dow Jones via Comtex)
  • News release from the Comex division of the New York Mercantile Exchange

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