MARKET COMMENTARY
3M LME copper traded in the range of $8245-$8704.5 in January. Copper prices tested $8245, the lowest level since December 6, on January 18, as data from China increased demand concerns and pressured by expectations that the US Federal Reserve would postpone interest rate cuts. When we came to the end of the month, it tested the highest level since December 28 at $8704.5, with the dollar retreating due to weak US labor market data before the Fed decision, and completed the month at $8615.5 with a 0.62% gain.
Copper prices started the first week of 2024 with a gain, supported by low stocks and increasing incentive hopes due to manufacturing data from China. Copper facing losses due to the uncertainties of US interest rate cuts and the strengthening of the dollar, it completed the week with a loss of 1.72% at $8415.
China's consumer price index (CPI) decreased to 0.3% in December, compared to the previous year, when it was expected to decrease by 0.4%.
Markets rose with support from the announcement of US foreign trade data as -63.2 billion dollars, above the expectations of -65.5 billion dollars. In the USA, CPI increased by 3.4% on an annual basis, above expectations of 3.2%.
Although 3M LME copper faced losses ahead of Chinese and US data, it rose to $8483 on 9 January, supported by low-level buying and a weakening dollar. It finished the 2nd week at $8295, with a loss of 1.43%, after testing the level of $8292.5, the lowest level since December 13, with expectations that the Fed might delay interest rate cuts following the strong inflation data from the USA.
In China, gross domestic product (GDP) growth was 5.2% in the fourth quarter, below expectations of 5.3%.
3M LME copper tested $8245, the lowest level since December 6, in the 3rd week, as data from China increased demand concerns and pressured by expectations that the US Federal Reserve will postpone interest rate cuts. 3M LME copper completed the 3rd week at $8380 with a 1.02% gain, with the support of buying from low levels.
Copper prices tested $8599, the highest level since January 2nd, in the 4th week, as expectations that the biggest consumer, China, will make more incentive statements to support the economy have strengthened. 3M LME copper gave back some of its gains due to the pressure of the gains in the dollar and the effect of sales from high levels and completed the 4th week with a 1.78% gain at $8529.
3M LME copper tested the highest level since December 28 at $8704.5 in the 5th week, due to the expectations that the Fed would start reducing interest rates before the Fed decision and the retreat of the dollar on weak US labor market data. It completed the month at $8615.5 with a 0.62% gain.