Copper prices stabilized on Monday after Chile allowed Codelco to resume copper mining at its El Teniente mine. Operations at this mine had been halted following the collapse of a section of the mine that resulted in six fatalities. Codelco revealed that the authorities had only allowed them to restart operations in areas unaffected by the mine collapse.
Concerns about copper supply on the world market had arisen after the mining accident on July 31 resulted in El Teniente mine being closed by the authorities in Chile. Following Codelco’s announcement on Saturday that they had obtained a go-ahead to restart operations, prices eased 0.1% on the LME on Monday. This reduction may seem modest, but prices had jumped 1.4% when the accident at Codelco’s facility triggered the closure of the mine.
Given that the week has just started, chances are high that prices could come down further since the cause of supply worries has been addressed.
Meanwhile, data from China indicates that producer prices in the country cooled a lot more in July than had been expected. This shows that domestic demand was sluggish since consumer prices remained unchanged in July from what they were in June.
China is the biggest consumer and producer of industrial metals like copper, so global prices often move in tandem with conditions in this country. Copper demand in the country is expected to tick upwards next month since the month of September falls within the peak season of production in China.
Trump has announced a 90-day extension to allow a trade deal to be negotiated between the United States and China. This is major development as it ensures a degree of stability in metals markets and the economy in general.
Commodity markets have remained muted as pivotal data on U.S. inflation is awaited this week. This data is likely to play a big part in providing clues about the likelihood of the Fed cutting its benchmark interest rate. When interest rates drop, industrial metals like copper thrive as economic growth takes place.
Other metals traded on the LME exhibited a mixed start to the week. Zinc’s price remained unchanged after starting the week going for $2825 for a ton, similar to how it ended last week. However, aluminum and lead slipped by 0.5% and 0.3%, respectively to start the week at $2,596.5 and $2,001.5 per ton.
Analysts will be watching out for the U.S. inflation data expected. This could have a major impact on the market for metals around the world. Copper value chain participants like Aston Bay Holdings Ltd. (TSX.V: BAY) (OTCQB: ATBHF) will be watching how the market responds to any data released.
NOTE TO INVESTORS: The latest news and updates relating to Aston Bay Holdings Ltd. (TSX.V: BAY) (OTCQB: ATBHF) are available in the company’s newsroom at https://ibn.fm/ATBHF
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