This article comes from Jinshi Data, author: Zhang Fujian
As economic stimulus measures, vaccination and climate change commitments promote the global economic recovery, Copper prices are heading towards a record high of US$10,000, and bulls have entered the market to take profits.
Copper prices hit their highest level in 10 years on Tuesday, with markets for precious metals such as aluminum and iron also gaining support, both rising to record highs due to global economic growth. In the early 1900s, commodities were in the midst of a supercycle, with prices rising sharply as orders from China surged. Today, commodity prices are heading toward the highs they reached back then.
One of the indicators of U.S. inflation expectations The Bloomberg Commodity Spot Index climbed to its highest level since 2012, and U.S. Treasury yields rose across the board. On Tuesday, the 10-year breakeven inflation rate topped 2.4%, reaching its highest level since April 2013. This indicator is often used to predict inflation over the next 10 years.
Just as copper demand is about to rise again, there are growing concerns that copper producers may have difficulty meeting the rising demand due to technical and regulatory pressures.
In Chile, a group of port workers began protesting the government's epidemic relief policies this week. Remember that Chile is the largest copper producer, and such strike actions may threaten copper supply in the short term. In the long term, Chile worries that higher mining fees will stifle investment and make the country less competitive.
BMO Capital Markets analysts including Colin Hamilton said in an email:
"Commodity demand is rising in the short term, but supply issues in raw materials and freight remain unresolved. At the same time, Medium-term global growth momentum will continue to boost financial market interest in overall commodities.”
As the world’s largest economies announce stimulus plans and climate change commitments, the global economy gradually recovers from the impact of the epidemic. As a barometer of the global economy, Precious metals such as copper are continuing to benefit.
London Metal Exchange (London Metal Exchange) Copper price finally closed at US$9,855.50/ton on Tuesday, having hit a record high of US$10,190/ton in February 2011.
Aluminum prices fell after hitting a three-year high. Iron prices are soaring in both Asian and North American markets. S&P Global Platts data shows that the iron ore index rose to a record high of US$193.85/dry ton.
While most markets are bullish on the commodity, Chinese demand for copper is likely to weaken in the short term. China is likely to ship more metal overseas as domestic demand falls short of expectations, opening the so-called export arbitrage window to traders for the first time since September last year, data from the Shanghai Financial Exchange showed.
ING senior commodities strategist Wenyu Yao said:
"This situation may curb some speculative buying in London in the short term."
However, on Wednesday morning, Goldman Sachs updated its view on commodities Commodity price forecasts predict commodities will rise another 13.5% in the next six months. Goldman Sachs does not see China as the only major source of commodity demand growth over the next decade.
At the same time, Goldman Sachs believes that people’s travel will increase significantly, mainly due to the continued advancement of vaccination in Europe and other places; seasonal transportation, manufacturing and construction activities will increase from now on and accelerate in June; and some international travel in May. Travel restrictions will be relaxed.
Andy Wong, senior investment manager of the international multi-asset team of Hong Kong Pictet Asset Management, said:
"Inflation will still be a theme for investors.The balance sheet of American households has been the most normal, and the problem of excess savings coupled with supply shortages will become more severe (which will push up commodity prices).
As for other markets, gold held steady as traders awaited the outcome of the Fed decision. The Fed has signaled to investors that there will be no major changes to its language on inflation and interest rate expectations.
As markets bet on autos Demand from manufacturers soared, and palladium once climbed to US$3,000 per ounce. Since then, the largest miner Norilsk Nickel PJSC (MMC Norilsk Nickel PJSC) announced an expansion of production, and palladium gains have narrowed.
analyst James. · James Steel said in a report:
"High palladium prices may lead to significant capital outflows. "
In terms of autocatalysts, platinum as a substitute for palladium, its price is relatively low, which should suppress some of the demand for palladium.
