Market Experts Discuss How High Copper Can Go Amid Chinese Industrial Revival

Market Experts Discuss How High Copper Can Go Amid Chinese Industrial Revival

March 1, 2023 0 By Wiley McDermott

After reaching its all-time low back in November 2022, the price of copper has made a strong comeback.

As of this writing copper futures index showed that copper was exchanging hands at around $4.01, this accounts for a 1.43% increase in the price of copper.

Despite the fact that copper has shown some recovery in terms of its price. But the overall volume of the commodities market has been downward.

Experts have already predicted that the commodities market is most likely to sink amid the intense economic pressure.

Hence, the commodities market is showing strong fluctuations. Back in March 2022, copper reached its highest price level.

But the price of precious commodities plummeted after it was pressurized by the economic recession talks.

As we are moving forward, the market is once more heading in a similar direction. Experts once more started to talk about inflation, economic recession, and increase in interest rates.

Moreover, lower-than-expected consumption from Chinses industrial giants, a strong U.S. Dollar, and a massive selling-off on LME all these factors dragged the copper price down.

Over The Past Few Weeks Copper Came Back Strongly

Despite having a poor 2022 and after a sluggish start in 2023, copper has finally shown signs of recovery.

Most recently Chinese federal regulators have lifted the strict Covid-19 policies and announced that the Chinese industry will operate at its full potential.

As Chinese manufacturing giants have started to operate at their peak efficiency, this has given much-needed momentum to the price of copper.

As compared to copper’s price back in November, the current price of a precious commodity is already 10% up.

If China’s copper consumption rose, this will force a further hike in the price of copper. Many experts have picked copper as a buy option. They also added that now is the best time to invest in copper for short-period gains.

Experts Discuss the Future of Cooper

Recently China’s recovery from Covid-19 has been a positive sign for the demand and price of copper.

Apart from that some long-term positive indicators can be very supportive for the price of cooper in the future. Recently, the boom in the production of electric vehicles will require immense quantities of cooper.

Higher demand will be driving the price of copper further high. Moreover, the recent increase in the demand for household goods also put copper on the list of red-hot commodities.

Higher demand for the metal has put pressure on the copper miners and soon the market demand for copper might exceed the supply of copper.

There are strong indicators that might intensify the demand for copper for the remainder of 2023.

But the single most significant hurdle that can bring the price of cooper down is the current uncertainty regarding the interest rate.

The United States Federal Reserve officials are not sure about the future economic condition of the country.

There are inflation and recession talks, so the majority of the Feds officials believe that an increase in interest rate is needed to protect economic growth.

High-interest rates have given momentum to USD against the commodities. The strong USD has put extra pressure on the whole commodities market.

This could be a troublesome reason that can cause fluctuations in the price of the U.S. Dollar. It is expected that Feds might increase the interest rate from 50 to 75 basis points.

Most recently, the financial experts of Goldman Sachs and Bank of America said that for the remaining part of 2023, the Feds might increase the interest rate three more times.

Market experts do believe that China’s industrial revival will create huge demand for copper that will eventually push cooper towards the strong bullish range.

It is expected that by the start of March 2023, copper might touch the $4.62 mark.

Copper reaching the $4.63 mark means that the metal has recovered by 78.6% from its previous year’s price.

But right now, the current is slightly trading above the $4 mark, which means there is potential for short-term gains.