Doctor Copper Can’t Find a Cure
The price of copper tumbled 10% in January to mark its worst monthly performance since 2015. The commodity has obvious catch-up potential for when the Chinese economy gets back online after this virus, but who dares time the bottom?
To halt the compounding ‘2019cCov,’ more than a dozen Chinese provinces have extended the Lunar New Year holiday until mid-February. The move keeps workers quarantined at home, but of course, no industrial orders for copper are possible if all the industrialists are on a sick day. Something has to give!
Copper prices have been dragged down on commodities exchanges in London and New York, and Invstr sentiment has swung the wrong way. Markets are open, but traders are anxious about how demand for copper could abruptly halt this week. Quite literally, China’s fast-developing urban landscape is built on the base metal!
The Chinese government pledged to support re-opening domestic markets a few hours ago by easing the money supply, but a coronacure to bring back a world economy on the verge may be an analyst’s only condition for buying back in.
The home building and commercial construction sectors rely on copper, and the country consumes over half the world’s supply. That dependence has led investors to dub the base metal, “Dr. Copper!”
It’s reputed to have a Ph.D. in economics because of its ability to foreshadow world trade, oil and gold prices, and gross domestic product (GDP) growth in the world’s second-largest economy. It’s never crashed on a coronavirus before, but many still want to know the doctor’s meaning of a 10% drop-off!
