New Year celebrations in China this month appear to have done little to temper trading in copper, with prices reaching eight-year highs of over US $ 8 300.
These levels reflect an increase of 90% in less than a year and recent orders on the London Metal Exchange will hearten those who are expecting imminent corrections in future trading.
Even so, the emphasis for Chinese traders is clearly for refined and unrefined copper rather than scrap. Year-on-year imports of the former rose by more than 31%, while scrap imports in 2020 of 940 000 was a 37% slump on the year before. Analysts believe this lower demand for scrap is a combination of difficulties because of Covid-19 and China’s new policy to stop ‘waste’ imports.
Demand for copper outside China has also been picking up and, in some territories, is beginning to exceed pre-pandemic levels with growing consumer demand. In the US, for example, permits for new housing in December were up 17% on the year before, according to official data.
According to analysis from Fastmarkets, the pandemic has caused a shift in spending patterns with consumers not able to go on holiday spending more of their cash on appliances such as washing machines.
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