Copper rallied to a fresh seven-year high on bets that further economic stimulus and a global recovery would fuel demand for the metal into next year.
Prospects for a US COVID-19 relief package before the end of the year grew substantially this week after a plan outlined by Republican and Democratic lawmakers emerged as the first real chance for a compromise that has eluded party leaders and the White House for months. Meanwhile, nations across Europe are pushing ahead with fast-track COVID-19 vaccine programs.
The copper market is witnessing the sharpest rally in more than a decade, with China’s rampant appetite for commodities and supply disruptions in the early stages of the COVID-19 pandemic lifting prices more than 75 percent from lows seen in March.
With the US dollar weakening, inflation expectations rising and governments putting unprecedented stimulus programs in place, further investor flows could drive prices higher still.
“This is 100 percent a macro story now,” Michael Widmer, head of metals research at Bank of America Merrill Lynch, said by telephone from London. “It’s really broadening now to the wider investor space.”
That is not to say fundamental conditions are not still helping prices along. With COVID-19 vaccines on the horizon, there are deepening concerns that miners could struggle to match demand as a global recovery bolsters this year’s China-driven boost.
“It’s a favorable environment from a price point of view,” Ivan Arriagada, chief executive officer of Chilean miner Antofagasta PLC, said in a Bloomberg TV interview.
China’s demand “has been sustained quite strongly,” he said, adding that the global copper market is heading for a slight deficit next year.
Still, TD Securities analysts led by Bart Melek said that broad commodity demand signals are now showing their first signs of stalling following the pandemic carnage.
This raises the question of how long the rally in copper prices can last given the combination of waning demand growth and less speculative buying, especially from China.
Copper rose as much as 1.3 percent to US$7,774 a tonne in London, the highest since March 2013, and settled at US$7,760.50.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
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