London (AWP/AFP) - The copper price reached its lowest level in a month while the Chinese reserves of the red metal accumulated in December, according to data of the London Metal Exchange (LME).
A ton of copper hit 6.930,50 dollars, its lowest price since the end of December, losing almost 2% in one session.
Since the 28th of December, when copper reached its highest level in almost four years at 7.312,50 dollars, the metal has lost almost 5%.
The fall of copper is primarily linked to the increase of the international reserves, which suggests that the global demand declines at prices that are this high, summarized Guy Wolf from the AFP, responsible for the research for Marex Spectron.
The London Metal Exchange observes the quantities of stored metals in certain warehouses which indicates the balance on the global market.
According to Bloomberg, the LME has reported a 17% increase of these reserves on Tuesday, namely 248.075 tons, which would indicate that the reserves are at their highest level since mid-November.
The reserves of China, the biggest global importer of copper, are particularly scrutinized.
Other data that were published on Tuesday showed a fall of 19,8% in Chinese import of copper scrap in December compared to the same month the previous year, explained Bernard Dahdah, an analyst at Natixis, to the AFP.
Under these conditions, the copper, generally linked to the growth indicators, hasnt benefited from the upward revision from the IMF for the global growth (from 2,7% to 2,9% in 2018 and 2019).
The revision from the IMF is mainly due to an increase in the forecasts for the United States. The American growth has a significantly smaller role than China when it comes to the copper consumption, warned M. Wolf.
However, the copper price could go up again over the next months, if the production would be disrupted.
In Chili alone (the number one producer globally, Ed.), 32 collective contracts from the mining industry have to be renewed, predicted the analysts from Natixis in a note.
AWP source, translated by Neelie from : http://www.zonebourse.com/CUIVRE-16161/actualite/Le-cours-du-cuivre-ploie-sous-des-stocks-surabondants-25856544/