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Like most industrial metals, copper has been plunging for a month. The specter of an economic recession is not for nothing.

The sluggish economic context is weighing heavily on the metals market. Because the rise in rates, as it is taking shape in Europe and the United States, is weighing on growth and is therefore not favorable to demand.

After the hearing of the director of the American Central Bank (FED) before the Senate on Wednesday, the specter of a recession has become a little more likely in people’s minds. And the prices of copper, the metal known to reflect the state of the world economy, unsurprisingly continued their decline, which began in early June, to fall back to their level of 16 months ago. In three months, the ton of copper has lost 20%.

The fall in prices does not impact production

However, this decline is offset by the strength of the dollar. For copper-exporting countries, the impact is limited: their receipts are in dollars and their expenditure in local currency, the exchange rate being favorable to them.

Miners are more directly affected because most of their costs are in dollars. Their profit per ton is therefore decreasing. But at current copper prices which remain very high, everyone makes a lot of money »explains an expert in the sector.

Chinese stocks, the great unknown

Demand for copper has not collapsed but the great Chinese unknown hangs over the markets. It is indeed impossible to know what the country’s real copper stock is, nor what the demand will be in the medium term.

After the euphoria of a strong Chinese recovery that did not materialize, fears of a global slowdown are gaining ground.

« We are currently in markets “ultra-wait-and-seewho are trying to understand the global economic equation sums up Yves Jegourel, professor at the National Conservatory of Arts and Crafts, holder of the Raw Materials Economics Chair. It is therefore unlikely that the prices of industrial metals will rise again quickly.

► To read also: Copper: strong demand and short supply of the red metal push prices up

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