In New York trade on Monday, September copper extending a rally to reach a high of $3.1765, sparked by a continuing drawdown of inventories around the world. It’s the tenth straight day of gains for the red metal after coming dangerously close to breaching the $3.00 a pound level at the start of June for the second time this year. The rally is the longest winning streak for the metal since 2005.
The copper price is highly correlated with economic growth thanks to the widespread use of the metal in the construction, transport and power industries. Defying market expectations, the copper price has dug itself out of a near four-year low struck mid-March of $2.92 a pound.
A complicating factor in predicting the copper market this year is Beijing’s crackdown on the use of commodities as collateral for letters of credit. “The Qingdao issue is raising concern over the status of supplies…”
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