The stock price of nickel, zinc and copper rebounded after the decline last week, which was caused by concerns about the new coronavirus variant, omicron. A recent report released by Capital Economics reiterates that prices of these metals will decline significantly as we move into next year. The argument by the London-based independent researcher notes that the weakening of the prices will continue as the economy of China slows but highlights that it’s too soon to know whether the omicron variant will add more pressure.
However, Soni Kumari, an analyst at ANZ, notes that if the omicron variant raises serious concerns, this may delay financial tightening, which will in turn be favorable for industrial metals.
On top of that, Capital Economics directs attention to the fact that supply could also be affected and any negative effect on prices may be alleviated, especially at a time when metal stocks are at really low levels. The report points out that virus-related government restrictions may also diminish demand, explaining that it expects the demand for goods that contain copper to decrease as international spending patterns shift to services from goods as international travel opens.
Despite this bleak future, the price of copper increased this week, recovering some of the losses incurred in the previous week, which were fueled by the new COVID-19 variant. Markets are currently trying to determine the possible impact of the newly identified virus on the recovery of the economy and the impact’s severity.
The World Health Organization warns that determining the omicron variant’s level of severity may take anywhere between a few days to a couple of weeks, given the lack of information on how its symptoms differ from other variants.
On the Comex market in New York, copper for delivery in March added 2%, hitting $4.39 per pound in midday trading. Data from Reuters shows that stocks for copper in London Metal Exchange-registered warehouses dropped to roughly 80,000 tons. This is about one-third of the level that was registered in August. Metal earmarked for delivery shows that more than 15,000 tons is scheduled for shipment.
The price of nickel on the London Metal Exchange also increased by almost 1.5% to reach $20,185 while that of tin rose by 1.6%, hitting $39,280. In addition, the price of lead advanced 2.2%, hitting $2,319 while that of aluminum rose by 1.4% to reach $2,650.
Copper mining companies such as StraightUp Resources Inc. (CSE: ST) (OTCQB: STUPF) can look forward to fairly stable commodity prices despite the discovery of a potentially more lethal COVID-19 variant.
NOTE TO INVESTORS: The latest news and updates relating to StraightUp Resources Inc. (CSE: ST) (OTCQB: STUPF) are available in the company’s newsroom at https://ibn.fm/STUPF
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