By Onome Amuge
Copper prices improved at the closing session of the week but the rebound was not enough to offset earlier losses earlier as concerns about a turmoil in the banking sector raised the threat of bank failures and slower economic growth.
Benchmark copper on the London Metal Exchange (LME) was up 2.1 per cent at $8,695.50 a tonne but still down nearly two per cent over the week to a 10-week low of $8,442 a tonne.
Market data showed that prices plunged by 3.7 per cent during the week as the collapse of Silicon Valley Bank and First Republic Bank,two mid-sized U.S. lenders, were followed by a crisis engulfing Switzerland’s Credit Suisse.
Ole Hansen, commodity strategist at Saxo Bank, said the mood on wider markets will dictate copper’s near-term price movement, though he expects strong fundamentals to lift prices before long.
On their part, analysts at Citi, projected a drop in the value of copper to $8,000 a tonne in the coming months amid concern over the U.S. banking system and credit growth.
They consider it as a strong long-term buying opportunity, while also predicting that prices will recover to $9,000 within 6-12 months.
On the other hand, copper demand In top consumer China, is growing firm and is likely to stay strong in the next quarter, buoyed by a seasonal peak in demand and easing COVID-19 restrictions.
For other industrial metals, LME aluminium gained 1.2 per cent at $2,294.50 a tonne, zinc was up two per cent to $2,915 a tonne, nickel advanced 0.8 per cent to $23,420 a tonne, lead climbed 0.1 per cent to $2,068.50 a tonne, and tin rose 1.2 per cent to $22,490 a tonne.
However, while nickel recorded a weekly gain, the rest witnessed weekly declines.
