Earlier in February this year, the price of copper rose to a nine-year high driven by the rush of speculative investment, expectations of tight supply and resurgent demand in China, the largest consumer of the metal.
This trend continued in the months that followed, with the demand for copper rising in April when the U.S. dollar declined in value. In May, copper for delivery had increased by almost 2%, with futures at $9351 per ton on the Comex market. As recent as this week, the price of the red metal rose again, driven by hopes that the demand for metals will grow as more hires take place across the United States.
Last month, companies in the U.S. hired the highest number of workers in the last 10 months, in addition to providing incentives and raising wages in an attempt to persuade the millions of unemployed individuals in America to enter the workforce. ANZ analysts stated that the increase in wages usually resulted in an increase in the demand for durable goods, which is an important sector for the metals market.
On the Comex market in New York, copper for delivery in September increased by nearly 2% from the settlement price recorded on Friday to $9587 per ton by midweek.
However, data obtained from satellite surveillance of copper plants revealed that the red metal’s smelting activity globally decreased last month, after it had rebounded in May. Many speculate that the drop was prompted by the closure of plants in China for maintenance.
A joint statement released last week by brokerage firm Marex and satellite service SAVANT reveals that the companies are now keeping track of nickel smelters’ activity, which demonstrated a weak refined nickel production but an increase in nickel chromium pig iron activity, which is sometimes referred to as nickel pig iron (“NPG”). NPG is made from low-grade nickel laterite ore, holds less than 5% nickel and is normally used as a substitute for refined nickel.
Many analysts predict a multiyear bull run for the red metal, with some expecting it to reach record highs by the first half of next year. Marex’s global head of analytics Guy Wolf added that while the maintenance period over in China was occurring as scheduled, the strong levels of nickel pig iron activity in the country were out of the ordinary. Marex has played a significant role in the development of SAVANT.
These rising copper prices are likely to give sector players such as Asia Broadband Inc. (OTC: AABB) impetus to ramp up its operations since the market is seen as being bullish for the years ahead.
NOTE TO INVESTORS: The latest news and updates relating to Asia Broadband Inc. (OTC: AABB) are available in the company’s newsroom at https://ibn.fm/AABB
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