According to the theory, because copper is required for the production of electrical and electronic items, especially in our cellphones and smartphones, the price of copper commodities increases when there is a shortage or depletion.
Furthermore, over a 5-year time period, COMEX copper futures have a beta of 0.0006 with the S&P 500. In comparison, over a 5-year time period, the S&P 500 and NYMEX palladium futures have a beta correlation of 1.18. Copper prices may fluctuate in response to variations in supply from mines. As well as changes in the global GDP. Although historically, neither copper output nor GDP growth have been significantly correlated with the value of the US dollar. This in relation to other currencies like the EUR, CAD, JPY, etc.
Industrial metals increased on Monday as a partial relaxation of COVID-19 limitations in the largest metals consumer caused copper to reach a three-week high. A weakened U.S. dollar also provided assistance as China increased expectations for a full economic reopening. At $8,504 per tonne, three-month copper on the London Metal Exchange was up 0.6%. In the Asian session, it rose to $8,555, its highest level since November 14.
The most-traded January copper contract on the Shanghai Futures Exchange finished midday trading 0.7% higher at 66,260 yuan ($9,529.56) per tonne after earlier reaching 66,860 yuan, its highest level since November 16.
“The increased hopes for China’s economy to improve today are the driving factor. With China’s reopening appearing imminent, attention shifted to economic growth “In a note, analysts at Marex Metals stated. The stringent zero-COVID policy in China has reduced overall demand and industrial activity and, last month, triggered unheard-of protests.
A weaker dollar helped to strengthen LME prices by making commodities priced in greenbacks more affordable. This for buyers using foreign currencies. After losing 1.4% the previous week, the dollar index was down 0.18% at 104.28, its lowest level since June 28.
Other metals saw gains of 0.8% to $2,566 per tonne for aluminum, 1.3% to $3,120 for zinc, 1.4% to $2,232.50 for lead, and 4.3% to $24,250 for tin.
Aluminum with a copper coating is also acceptable. However people rarely use it in the USA. There are no brand-new residential applications. Copper must make up at least 10% of the cross-sectional area of a solid conductor. Each strand of a stranded conductor in order for copper-clad aluminum conductors to be produced.
Aluminum prices on the SHFE were up 0.7% at 19,320 Yuan per tonne, nickel prices were up 3% at 207,750 Yuan, lead prices were up 1.7% at 16,005 Yuan, tin prices were up 3.9% at 194,530 Yuan, and zinc prices were almost unchanged at 24,520 Yuan.