Copper Prices up 7% in July, Buoyed by Lower Supplies, Weaker US Dollar. What’s Next?

Copper futures are trading slightly lower on Wednesday, but the industrial metal had an incredible July as prices climbed 7% higher last month. The red metal has been surging thanks to strong Chinese demand, lower supplies, and a weaker US dollar. Some experts think it could go higher in August.

September copper futures dipped 0.006, or 0.21%, to $2.875 per pound. Copper prices have been trading at their highest levels since February 2015.

The industrial metal soared 7% in July, buoyed by several events occurring right now.

Copper benefited from stronger demand from China. The world’s second-largest economy witnessed its copper imports increase in June, and the International Monetary Fund (IMF) revised its economic forecast by 0.1% to 6.7%, which some say could lead to even bigger copper imports. There were similar figures found in emerging markets, which saw greater demand in July.

A reduction in supplies further contributed to copper’s rise last month. Because of labor action in Chile and Indonesia, traders anticipate a disruption in supplies, which would be a boon for the red metal. Moreover, copper shipments in Chile and Canada may also be impacted because of refinery issues.

The US dollar has fallen to pre-election lows as the greenback slipped close to 3% in July. A lower dollar helps commodities like copper because it makes it cheaper for foreign investors to purchase.

BlackRock analysts wrote on Tuesday that there is still room for copper to grow this month.

We see signs that reduced supply and increased demand may be more than temporary and are likely to help keep industrial metals prices stable from here. Metals and mining firms have been improving their balance sheets by reducing debt and decreasing investment in additional production capacity

Other metals are a mixed bag right now. September gold futures fell 0.49%, to $1,278.60 an ounce. October silver futures tumbled 0.54%, to $16.67 per ounce.

This post was originally published by EarnForex