Copper hits the highest levels since Feb 2014

Rallies on China demand outlook.
Weaker DXY fuels the upside.

Dhwani Mehta FXStreet

Copper futures on Comex prolonged its rally for the fourteenth straight session and went on to hit near 4-year highs at $ 3.321 last hours, before easing to $ 3.309 levels, as of writing.

Copper: Further upside still in play?

The red metal continues to enjoy the year-end gains, with fresh signs of strengthening crude oil demand emerging from the world’s top copper importer, China.

Reuters quoted a company source with the smelter, citing that China’s leading copper smelter Tongling Nonferrous Metals Group has agreed with Freeport-McMoRan Inc for treatment and refining charges (TC/RCs) at $82.25 per tonne and 8.225 cents per pound as the 2018 benchmark.

Moreover, broad-based US dollar weakness amid falling Treasury yields and downbeat US fundamentals also helps underpin the sentiment around the USD-backed copper. A weaker US dollar makes the USD-denominated copper cheaper for the foreign buyers and vice-versa.

The recent rally in copper got fuelled after the Chinese authorities ordered its top producer, Jiangxi Copper Co, to halt output for at least a week to combat winter pollution. This came after the No. 2 smelter, Tongling Nonferrous Metals Group, was asked to make similar cuts.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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