Copper Slips Amid Ongoing Government Shutdown and Heightening Trade Tensions

Copper prices slipped as the week drew to an end as trade tensions between the United States and China went up a notch. The market was also dampened by the uncertainty resulting from the ongoing government shutdown in the U.S.

Benchmark copper prices on the LME fell to $10,528, a 1.1% drop. Prices had been lifted to their highest level in 16 months after disruptions to major production mines raised concerns about supply. Those concerns about supply pushed prices to $11,000 per ton.

As the government shutdown drags on into its third week, commodity markets are being impacted. An official with the Treasury department estimated that the lost productivity for each week of the shutdown would be approximately $15 billion. Inevitably, the price of copper is being adversely affected since the red metal often provides the pulse of the global economy. With the U.S. in uncertain times as the shutdown continues, economic growth prospects are dwindling.

Metals traders are also concerned about economic growth and manufacturing, especially in China. These concerns have led many traders who had bet on the red metal’s price climbing to close their long positions. These concerns are being stoked by forecasts that suggest the GDP of China will grow at a slower pace in Q3 compared to Q2 of this year.

Goldman Sachs analysts say the market for copper is likely to stay oversupplied for a while and they add that buyers of the metal in China are likely to limit their purchases if the price of copper goes beyond $11,000. Since China is the leading buyer of the metal, any reduction in purchases from the East Asian country often results in depressed prices due to limited demand.

The analysts also say that the bullish sentiment regarding the impact of AI growth, a weakening dollar and further rate cuts by the Fed is responsible for pushing copper to its current high levels. Other analysts seem to support this view, asserting that investment in grid infrastructure and data center expansion will push the appetite for copper higher in the years to come.

Currently, copper prices may be coming under pressure as a result of the government shutdown and uptick in trade tensions. However, these may not have a sustained adverse effect on the market for commodities, but stakeholders like Aston Bay Holdings Ltd. (CVE: BAY) (OTCQB: ATBHF) are likely to track these macroeconomic and geopolitical factors in order to gauge their likely impact on the short and medium term market conditions.

NOTE TO INVESTORS: The latest news and updates relating to Aston Bay Holdings Ltd. (CVE: BAY) (OTCQB: ATBHF) are available in the company’s newsroom at https://ibn.fm/ATBHF

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