Dr Copper's prognosis for the global economy is positive

Dr Copper’s prognosis is for a full recovery in the health of the global economy, and prices for commodities overall are signalling something better than just a return to pre-pandemic conditions.

Copper gets that honorific because demand for the metal is acutely sensitive to economic conditions. It is now trading about 26 per cent above its price a year ago, before public awareness of the coronavirus hit markets, and 72 per cent above last year’s March nadir.

At the same time, Bloomberg’s broader commodities index shows commodity prices generally have fully recovered and are higher than a year ago, wiping out the memories of the plunge they experienced in March.

The situation is particularly acute in copper, where the grades from the existing major deposits have been declining (and costs increasing) for years, and no new mines of significance have been developed.

Thus the key ingredients for a new resources boom – a super-cycle – are present.

A surge in demand appears likely in an environment where supply is expected to be constrained for at least some years.

https://www.watoday.com.au/business/markets/dr-copper-s-prognosis-for-the-global-economy-is-positive-20210114-p56u1c.html


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