Strategic and Base Metals Take a Nosedive
ETF top story of the week in Canada.
Prices of strategic metals and base metals experienced another decline this week due to a combination of factors, including a firmer greenback (with the index dollar above 104), supply recovery, and weak demand in China.
As an illustration, copper – a key indicator for the global economy – recently hit a milestone of $8,000 per ton for the first time in 2023. In the face of disappointing economic data from the world's leading consumer, China, the metal plummeted by approximately 5.70% this month and by 14.35% from its mid-January level. This downward trend follows the sharp gains observed earlier in the year after the end of China's Zero-Covid policy. However, Chinese smelters have intensified their exports in an attempt to counter the above-mentioned poor domestic demand, helping to replenish inventories abroad.
As a result, speculators are now increasingly adopting bearish positions, signifying a shift in market sentiment compared to the optimistic outlook analysts held in the first quarter. The latter had previously predicted that copper would reach an all-time high above $10,500 per ton within a year. Despite the ongoing support provided by the green-energy transition (which bodes well for the long-term prospects of the bellwether metal), China-related concerns are currently having a dominant influence on the copper market as well as other base-metal markets.
Consequently, the data group ‘Base Metals’ lost more than 2% over the week and some 12% since the start of the year.
Worldwide Group Data
Fund-Specific Data
Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.
