Copper Moves Closer to $10,000 Mark as it Consolidates its Gains

Last month, a weak USD and resilient demand helped copper to register four weeks of gains on the London Metal Exchange. As this month gets underway, the red metal is building on those gains and has inched ever so close to the $10,000 per ton price level.

The red metal registered gains of 3% in the course of August, and yesterday’s trading on the LME saw it record a 0.3% uptick to reach $9,928.

When the dollar weakens, commodities that are sold in dollars usually benefit because traders who hold other currencies see the metals as more affordable. The last time that copper sold for $10,000 a ton was in July. The metal has exhibited resilience in the face of various headwinds, such as the close shave from being subjected to import tariffs by President Trump. Markets had braced for the worst, but the president spared the refined metal from import tariffs.

Considerable volumes of the metal are still being shipped to the U.S. given that the price of the metal in America is still higher than the price on the LME. The LME price for copper is often the benchmark for the price of the metal around the world.

The dollar index has retreated as markets increasingly anticipate an interest cut when the Fed meets later this month. Investors are also concerned about Trump’s unprecedented decision to fire Lisa Cook, a Fed governor, and this has weighed on the USD. Concerns about central bank autonomy have an adverse effect on the currency, and many think Trump isn’t letting the Fed do its work without undue influence.

Additional downward pressure was exerted on the dollar after an American court made a ruling that declared most of the tariffs imposed by Trump to be illegal.

As all those factors weakened the dollar and made copper more attractive to non-U.S-based buyers, the metal had other factors supporting its price to move upwards. China has had reasonably good activity that has supported demand for the metal. Zijin Mining estimates indicate that H1 of this year recorded a 10% increase in the demand for copper in China.

However, analysts caution that the picture could be different in H2 given that activity is tamping down in China and this could reduce the consumption of the metal in the largest consumer of copper around the world. This demand slump could weigh on global prices of the metal over the coming months, analysts at Goldman Sachs say.

Copper ecosystem players like Torr Metals Inc. (TSX.V: TMET) will be tracking commodities markets to glean how the trajectory of this metal could pan out in the medium to long term as the fortunes of the metal on the global market often impact investor interest in stocks.

NOTE TO INVESTORS: The latest news and updates relating to Torr Metals Inc. (TSX.V: TMET) are available in the company’s newsroom at https://ibn.fm/TMET

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