Copper prices are increasing due to shortage of supply by largest producers Chile, Indonesia etc.
Copper, once buoyed by optimism over US President Donald Trump’s infrastructure plans, is now being powered to fresh highs by optimism over China. Copper received an additional boost on Monday after the International Monetary Fund (IMF) increased its growth expectations for China in 2017 and 2018, while leaving its forecast for the global economy unchanged and trimming its forecast for the US. The IMF also raised its growth estimates for Europe and Japan. A report from Citigroup showed that Chinese imports of refined copper rose from a month earlier. China accounts for nearly half the world’s copper consumption, and its faster-than-expected economic growth and increase in industrial production have helped drive prices higher.
Copper prices touched a five-month high on Tuesday driven by signs of stronger Chinese demand and lingering supply-side concerns .The base metal jumped 2.21% to $6,167/MT on Tuesday. On the supply side, Antofagasta PLC and Barrick Gold Corp.'s Zaldívar mine averted a strike overnight, but threats to supply still exist. Freeport McMoRan Inc.'s Grasberg mine in Indonesia, the second-largest copper mine in the world, entered its fourth month of strikes on Monday, which helps further boost the base metal price.
One of the best bets in India to take advantage of the global increase in copper prices globally is to BUY Hindustan Copper Ltd. It remains an excellent long term bet at current levels as we expect demand for copper to rise substantially over the next few years on the back of higher demand for renewable energy globally which require a higher proportion of copper as compared to conventional energy. Find below a link to my report on Hindustan Copper Ltd.
Sabyasachi Paul has been associated with equity research and advisory on equity markets in India for over 9 years & currently heads the equity research desk of Eastern Financiers Ltd, Kolkata.He also manages a portfolio on the online platform Kristal. Find link to the strategy named 'The Tortoise'