The price of copper reached 30-year high, jumping during today’s trading session by 4.5% to 5850.50 USD per ton. The price growth may be the result of speculation in the Chinese market, related to the election of Donald Trump for president of the United States. According to the economists, the implementation of Trump’s plans for infrastructure development will rise the consumption of the commodity prices.
But despite the recovery in these markets, the analysis shows that the fundamentals have not changed and the level of demand is unlikely to change during the next months.
The large projects could significantly boost base metals, which have risen swiftly this year after struggling with overcapacity, stockpiles and weakening demand from China, which is the world’s top consumer. The commodity’s surge builds on a multiweek rally, which has lifted prices on expectations of resurgent Chinese manufacturing growth and falling stockpiles of the metal on the stock exchanges. However, the extended gains have raised questions on the sustainability of copper’s recent move higher.
The investors were also pushing up shares of companies that may benefit from bulked-up spending on US infrastructure projects. The stocks of Caterpillar Inc was on pace for a nearly 14% jump for the week, while Dublin-based building-materials CRH PLC CRH was on course for a 12% leap.
Increased fiscal stimulus in the U.S. and other developed markets is so important for the industrial metals because demand in world ex-China has barely expanded over the past five years.
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