Copper starred in commodity markets last week as a weaker US dollar added to continuing demand and improving market fundamentals.
Comex copper topped $US4.33 a pound – the highest it has been since August 2011 and moving past the previous nine year plus high hit in early March around $US4.29 a pound.
That left copper up 4% for the week and more than 23% for the year to date. A year ago it was down around $US2.17 a pound (March 22) in the midst of the first pandemic lockdown.
Since then recovery activity – first in China, then elsewhere, and now the US has added to demand for the metal from the rapidly growing renewables sector for vehicles, power transmission, wind farms and wiring.
As well strong home building activity in developed economies – especially in the US, Australia and now China has added to demand and drawn extra output from producers.
Newcrest will give a timely update this week with its first quarter report on how much gold and copper it produced, especially at its huge Cadia mining complex in NSW. OZ Minerals’ March quarter late last week was bullish with a forecast of doubling copper output in the next few years.
Globally, the copper market has moved into a small surplus as more production emerges (that’s after the big deficit for calendar 2020 because of a sharp Covid driven fall in output in Peru especially).
The global world refined copper market showed a 28,000-tonne surplus in January, compared with a 1,000 deficit in December and a 34,000 tonne deficit in the year-earlier quarter, the International Copper Study Group said in its latest monthly bulletin.
Comex gold prices ended Friday down 0.1% at $US1,777.80 an ounce for a loss for the week of 0.03%. Comex silver settled at $US26.075 for a tiny gain for the week of 0.04%.
The US growth and inflation data and the mid-week Fed meeting could see gold nudge $US1,800 an ounce by the close on Friday. A weak inflation reading will hit sentiment.
Iron ore continued to rise on Friday and last week as well, hitting a series of new all-time highs for the in demand 65% Fe fines product produced in Brazil.
The price of 62% Fe fines (mostly from Australia’s BHP and Rio Tinto) rose $US2.63 a tonne on Friday to $US186.25, still within sight of the all-time high just over $US190 a tonne That left the price up $US7.84 a tonne for the week.
The price of 58% Fe fines (mostly from the Pilbara and the likes of Fortescue metals) rose $US3.50 to $US162.88 a tonne. That left the price $US10.03 a tonne higher over the week.
And the price of 65% Fe fines (mostly from Brazil), jumped $US2.20 a tonne to $US220.90 a tonne. The price rose $US9.80 a tonne over the week.
Oil fell on Friday and was down 1.6% for the week, settling at $US62.14 a barrel. Brent crude ended the week at $US66.11, down 0.90%.
