LONDON, June 16 (Reuters) – The copper price has recovered strongly from its COVID-19 collapse in March.
London Metal Exchange (LME) copper is currently trading at $5,810, up 33% from its March 19 low of $4,371 and back to where it was before the deadly coronavirus knocked out global manufacturing activity and demand for industrial metals.
The world, Doctor Copper seems to be saying, is ready to move on. Or at least China is. As ever, copper and other industrial metals are taking their fundamental cue from the world’s largest user.
The Shanghai Futures Exchange’s (ShFE) base metal contracts are all trading in backwardation with the exception of nickel. The premium for prompt material reflects dwindling exchange inventory. After surging during China’s lockdown, ShFE stocks are now mostly falling just as fast.
Which is not what most expected, particularly for copper. “Where has all the metal gone?” Such was the title of UBS’ Monday copper research note. The bank has significantly lifted its copper price forecasts.