Power play

5 October 2020 By Anna Szymanski

The metal’s price has jumped around 40% since March, hitting multiyear highs. Increased Chinese demand, tight supply and a weaker dollar played a part. Higher inventories could bring a reversal. But with a boom in renewable-energy infrastructure, optimists have the right idea.

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The price of the most actively traded copper futures contract rose back above the significant $3 per pound level on Sept. 30, according to FactSet. The $3.11 price on Sept. 18 was the highest since June 2018 and represents a 47% increase from March lows. The price fell to $2.86 on Oct. 1, but recovered to just under $3.00 the following day.

China's official manufacturing Purchasing Manager's Index rose to 51.5 in September from 51 in August, according to the National Bureau of Statistics on Sept. 30. The PMI sub-index for new export orders was 50.8 in September, up from 49.1 the previous month, following eight months of declines. China is the world’s largest consumer of copper.

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