1/14/2025
HERE’S WHY THE COPPER PRICES ARE SURGING
Copper prices have started the year well even as the US dollar index and government bond yields surged.
The main catalyst for the copper prices is a trade report released yesterday by China. China’s activities are important because it is the biggest consumer of copper, iron ore, and other industrial metals.
Data by the statistics agency showed that China’s trade surplus soared to a staggering $992 billion even as the economy slowed. This figure was 21% higher than a year earlier.
China exported goods worth $3.6 trillion, with those to the United States surging to over $525 billion. These numbers suggest that the Chinese economy is doing modestly well since exports are the second-biggest part of the GDP after consumer spending.
Also, copper prices jumped after reports showed that Donald Trump was moderating his talk on tariffs. According to Bloomberg, he is now considering raising tariffs gradually as his administration negotiates with top countries like China and the European Union.
According to S&P Global, copper demand will be relatively high this tear. The company anticipates that China’s copper smelting production will continue doing well as the supply environment remains tight.
Last, copper prices are impacted by the bond market.
Economists expect that the Fed will continue holding rates steady in the first part of the year and then start cutting in July this year. That’s because the job market is doing fairly well, while inflation has remained significantly higher than the 2% target for a while. Economists expect Wednesday’s data to show that the headline inflation rose to 2.7%, while the core CPI rose to 3.3%.
Some of the top companies that will benefit from the ongoing price rises are popular mining giants like Glencore, Rio Tinto, BHP, and Vale.