Copper Prices Expected to Rebound by Year-End

06:23 09/12/2018

Copper stocks are severely oversold.

But with time, they’re likely to bounce back on heavy demand and cooling trade tensions.

In fact, the U.S. just proposed another round of trade talks with Beijing to avoid further escalation. If accepted, it could help reduce tensions between the two countries after President Trump threatened another $200 billion tariff.

Just the idea of cooling tensions was enough to send copper prices higher on the day.

But we’re not the only ones that think so.

According to the International Business Times, copper prices are likely to rally by year-end,

as global trade issues recede, and as demand picks up steam

As they report:

“Eleni Joannides, principal analyst for copper at Wood Mackenzie, pointed out that the demand in China remains firm after the country announced a ban on the import of category-7 copper scrap and the 25 percent tariff on imports from the U.S.” In addition, “Casper Burgering, senior sector economist at ABN Amro, expects the emotions that weighed on copper ‘to cool again, allowing fundamental trends – such as supply and demand – to regain the upper hand.’”

Paul Robinson, director at CRU Group, sees positive sentiment returning. “You've got good demand numbers and you've also got a very positive story about what is likely to happen to the fundamentals of copper within the next two to three years because of good demand growth and because of a lack of investment in new copper mines,” he says. “We don't yet see any indication that there has been a real impact on demand even though there are these concerns around future demand on trade tensions.”

Some of the top copper stocks to keep on radar, include Southern Copper SCCO , BHP Billiton BHP  and Freeport-McMoRan FCX .

This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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