Copper prices have been on the rise and could continue their ascent if the world’s two biggest copper mines continue their strike.
According to a recent report from CNBC, copper futures contracts for March delivery grew by more than 1.5% this week following information that BHP Billiton (LON:BLT) is halting production at the world’s largest copper mine, Escondida, located in Chile.
“It’s presenting the market with a bullish case for a little upside, Vivienne Lloyd, base metals analyst for Macquarie in London, told the news source.
Copper prices were already on the ascent, growing more than 30% last fall with the U.S. dollar weakening close to the election, combined with traders’ more optimistic views on China.
“Traders were already bullish into the strike," Dane Davis, commodities research analyst at Barclays (LON:BARC), said. “People have watched the negotiations deteriorate.”
Copper Disruptions Bring Upside Potential
Our own Raul de Frutos wrote just this week on the factor the copper mine strikes will play in the metal’s recent bull run. He added:
Base metals looked more bullish in January and strong Chinese data is no doubt driving that. China’s PMI was in growth territory for the seventh consecutive month.
Raul concluded:
Copper prices might look expensive compared to what they were just three months ago. However, that rally might just be the beginning of a bigger move. Sentiment in the industrial metal complex remains quite bullish and there are factors currently playing out that could build the case for another rally in copper prices. Copper buyers should minimize their commodity price risk exposure accordingly.
How will copper and base metals fare in 2017? You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds.