Copper Prices Decline Following New COVID RestrictionsBy Lorenzo Núñez | Tue, 08/17/2021 - 10:20
Copper prices have declined during the beginning of this week after factory output and retail sales in China rose less than expected in July. Retail sales increased 8.5 percent year-on-year versus the median estimate of 10.9 percent, while industrial production increased 6.4 percent year-on-year versus the median estimate of 7.9 percent.
The new virus restrictions introduced at the end of the month to contain fresh outbreaks have had a negative effect on retail sales. In addition, China’s refined copper imports fell for the fourth straight month in July, adding to the sense of lost momentum. China’s January-to-July copper import volumes dropped by more than 10 percent compared with the first seven months of 2020. In addition, the biggest copper buyer in the world bought 3.219 million tons of unwrought copper and copper products from January to July, down 10.6 percent compared with the same period in 2020. “The dollar is one factor behind the selling and the other is Chinese demand,” one copper trader told Reuters.
Despite the drop, Fu Linghui, a spokesman for the National Bureau of Statistics said China will maintain a “stable recovery” in the second half of the year, with the main indicators staying “within a reasonable range.” However, Lu Ting, chief China economist at Nomura Holdings argued “We continue to expect a notable growth slowdown in the second half as Beijing leaves little space for dialing back its unprecedented tightening measures on the property sector”.
It is important to mention that copper is close to be considered the mineral of the future, with experts in the field calling it the key to a carbon neutral future. Steve Robertson CEO of Infinitum Copper told MBN in an interview, that copper is essential to achieving a low-carbon world. “I believe that the future of the industry, society and our lives will depend heavily on copper, as there is no other replacement for it. Copper will be the metal that leads the world’s green transition.” However, things remain unknown in regards to copper’s value with experts still considering gold as the metal of the future, even if it lacks copper’s industrial value.