Copper for September delivery closed up 2.84% today.
Copper stocks did even better with Freeport McMoRan Copper and Gold (FCX) closed up 5.73% for example. Southern Copper (SCCO) ended the day ahed 3.37%. And First Quantum Minerals (FQVLF) traded up 10.14%.
So what’s going on? It will take a few posts today to explain and suggest trends that might be traded for a profit.
Let’s start, though, with the simple first order explanation: The International Monetary Fund is out today projecting higher growth for China’s economy. China’s GDP will increase by 6.7% in 2017. That’s up from an earlier forecast of 6% growth. For the period 2018-2020 the IMF said that annual growth in China would average 6.4%. That’s a huge upward revision from the earlier estimate of 6% annual growth.
For years copper has been the commodity most closely linked to growth in China’s economy. After growth in China meant more demand for copper to wire homes and factories and air ports and high-speed trains. So it’s no wonder that a major upgrade in projected growth from the IMF for China’s economy would push up the price of copper.
But that’s not all that’s going on…. I’ll continue this story in my next post tomorrow.