Copper's Made-in-China Rally Has Friends
After demand provided the spark, output constraints in coronavirus-hit Latin America may supply the next leg up.
The Covid outbreak is imperiling Latin America's copper output.
Photographer: Alejandra Parra/Bloomberg
Copper has erased losses racked up in the early months of the coronavirus outbreak. China’s economic uptick, set to be confirmed by second-quarter figures this week, is encouraging an optimistic view of demand. Latin American supply constraints may be a bigger factor in propelling the price higher, though, with pandemic-related closures and the prospect of strikes ahead. Neither threat will ease soon.
China, which accounts for roughly half of global copper demand, is certainly doing its bit to encourage bulls. Industrial production rose 4.4% from a year earlier in May and is likely to have accelerated further in June. Gross domestic product will expand 3.4% in the second quarter, Bloomberg Economics forecasts, after contracting in the first three months.