Financial Associated Press (Shanghai, Editor Zhou Ling) News , copper prices, as a leading indicator of economic prosperity, have continued to fluctuate and decline since the second quarter. Analysts warned that if copper futures continue to fall below key levels, it could mean a deterioration in the economic outlook.
U.S. copper futures prices have fallen 9% from the year's high in mid-May to about $4.37 per pound. However, U.S. copper futures are still up more than 20% so far this year amid the reopening of the economy and trillions of dollars in government spending. But if its price continues to fall slightly, it will enter the so-called "retracement zone" - a drop of 10% from the recent high.
At present, the market is most concerned about whether the price of U.S. copper futures will fall to $4.20. Copper prices have fallen to this level four times since April, only to rebound quickly each time. "(If) copper prices fall below $4.20, it will raise concerns about the sustainability of the (economic) recovery." Tom Essaye, founder of Sevens Report Research, wrote.
Wayne Wicker, chief investment officer of Mission Square Retirement, also said, "(If) copper prices continue to break through support levels, it is not a good sign for the economic outlook."
According to Citi economists, analysts and investors expect The global GDP growth rate will slow down from 6% in 2021 to 4% in 2022. Although the new coronavirus Delta variant is unlikely to trigger a new large-scale blockade, it is also having a negative impact on the economy, with recent cases of new coronavirus infections continuing to surge in the United States, Southeast Asia, Japan, and the European Union.
Currently, companies such as Amazon have announced that they have postponed the return of employees to the office, and some large-scale commercial drama events such as the New York International Auto Show have also been cancelled.
Because copper is widely used in industry, its price often reflects the market's confidence in economic recovery. However, Goldman Sachs recently raised its long-term outlook for copper based on a significant increase in electric vehicle sales over the next decade.
The European Union recently proposed stricter emission standards , which will reduce carbon emissions by 55% by 2030 and ban the sale of gasoline-powered cars by 2035; US President Biden signed an executive order on August 5, setting a 2030 electric The proportion of cars accounting for new car sales has reached the target of 50%.
Goldman Sachs recently reiterated its bullish forecast that copper prices will reach $11,000 per ton by the end of the year (just under $5 per pound), as well as $11,500 per ton by this time next year.
