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| Commodity News |
| HeadLine : |
Copper Rebounds After a Beating |
| Date : |
Apr 17 2014 |
Copper for April delivery rose 1.1% Wednesday to $3.0505 a pound on the Comex division of the New York Mercantile Exchange. The most active May contract is up about 4% from a 3 1/2 -year low hit in mid-March.
Driving the gains are hopes that China, the world's biggest buyer of copper, will take steps to boost economic growth. Rising costs of production are providing a solid floor for prices, analysts and investors say.
Bullish investors say copper prices are just above the level where miners would need to start reducing production to avoid losses on their least-profitable operations.
Investors also expect China to take steps to boost growth, raising demand for copper, which is used to make a variety of goods, including smartphones and air conditioners.
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Copper prices have fallen by more than one-third since 2011, around when it became clear that China's economy was starting to cool.
Slower growth in China, which consumes 40% of the world's copper, is expected to leave the market with a surplus of 385,000 tons this year, according to Goldman Sachs Group Inc. China's government is targeting a 7.5% growth rate this year, which would be the weakest performance since 1999.
Some investors have stuck with copper as China's economy gradually slowed down, easing fears of a hard landing.
Economic numbers released late Tuesday showed the economy grew at 7.4% in the first quarter, slightly above expectations.
Copper imports also continued to rise in the first quarter, government data showed last week. A feared crackdown on alternative forms of lending, including the use of copper as collateral, hasn't been as severe as many expected.
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