Faces uncertainty as copper prices rise | mining | economy

market Copper Despite some positive signs, price action remains uncertain as it has yet to confirm a firm uptrend.

According to the latest report from the LME (London Metal Exchange) Traders’ Confirmation, mutual funds have returned to long positions in copper after holding a brief short position at the end of May.

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read more: Chile’s mining output fell 9.2% in May, due to lower copper activity

The price of this metal, which is used in various applications such as wiring and construction, is 17% lower than the March 2022 price.

Copper is an important raw material for electric vehicles, which seek to convert energy and reduce carbon emissions.

“At the moment, two major economic forces are battling to determine the path of copper prices: the Chinese economy’s recovery to support and expectations of higher interest rates from the Federal Reserve.”, explained Washington Lopez, CEO of Washington Capital.

While the long-term bullish narrative fueled by projected supply shortages is a valid concern for markets, LME commodity stocks have continued to rise since January, which could offset bullish momentum.

On the other hand, the economic outlook for the US and stimulus measures implemented by China will begin to reduce these inventory levels. “However, it depends on how the Chinese economy and consumers react. Despite the incentives, consumers are likely to exercise caution, particularly in the real estate sector, which has been affected. Economist Lopez added.

On the other hand, China’s copper imports rose more than 9% month-on-month in May this year. If this trend continues, the markets will come under pressure again due to tight supply.

As the copper market continues to evolve, investors and analysts focus on economic factors and demand and supply trends that will affect the future direction of the price of this important metal.