Copper remains one of the most utilized metals in the world. Because of its ductility and excellent conduction capabilities, the metal is used in all sort of electric work. As the world’s population increases, the use of the metal will continue to increase.
In recent weeks, the price of copper has remained close to a nine-month after initial fears of a slowdown in China have dissipated. This week, the country reported that its economy increased by 6.4% in the second quarter. This was the same growth the country experienced in the fourth quarter of 2018. It was in line with the expectations. Still, this is still lower than the double-digit growth the economy experienced in the previous years.
This week also, the country released its industrial production data. This number is directly related to the price of copper because the metal is used in the production. In March, the country’s industrial production rose by 8.5%, which was double the expected 5.6%. In February, the production had increased by 5.3%.
Previously, data from China had started to show signs of bottoming. In fact, the country’s exports and imports have continued to increase. The same is true with the manufacturing production. Further, the country is in the final days of the negotiations with the United States, which has boosted the confidence of the economy. In fact, China’s stocks have outperformed those of the United States and Europe this year.
The price of copper has also been influenced by the supply side. A number of strikes in the key production centers will influence the price. For example, there is an ongoing strike at the Las Bambas mine in Peru. There have been other strikes in Congo, Chile, and Spain.
As shown in the annual chart below, the price of copper has continued to increase after falling to a low of $2.53. On the chart, the price has reached a high of $2.95, which is along the 50% Fibonacci Retracement level. The price is above the 21-day and 42-day moving averages while the MACD appears to be easing. There is a likelihood that the price may continue moving higher, to test the important support level of $3 as the economic sentiment continues to improve.