By REBECCA MUSHOTA –
COPPER prices are expected to continue rising this week, according to the Investment Network News bulletin released on Saturday.
The bulletin said copper, which is Zambia’s main foreign exchange earner, has continued on a winning streak.
“The red metal has gained 17 per cent since January 15, and recently got another boost when the United States (US) dollar fell following the latest US Federal Reserve meeting,” the bulletin said.
The Federal Reserve meeting wrapped up its most recent two-day meeting last week, announcing that it will leave the target range for the benchmark interest rate unchanged at 0.25 to 0.5 per cent.
As noted by The Wall Street Journal, that outcome was more dovish than expected, and was a boost for metal prices.
Rising oil prices have helped to provide some support as well.
“The fact that the US Federal Reserve has signalled that it will not be raising interest rates quite as sharply this year as previously predicted is driving metal prices up significantly,” states a note from Commerzbank.
Copper prices have been on the rise for most of February, fuelling expectations that a bottom has been reached.
“On March 11, the spot price was US$4,987 per metric tonne, which was up 11.9 per cent from the same day in February and was 6.0 per cent higher on a year-to-date basis.
“Nevertheless, this was down 13.3 per cent from the same day in 2015,” the bulletin said.
Investment News Network said more broadly, the recent uptick in copper prices has been caused by a number of factors, including production cuts from copper producers and expectations for fiscal stimulus in China.
Positive expectations for global growth on the back of strong US data have also given a boost to the red metal.
Currently, the consensus forecast is for copper prices to rise to $4,904 per tonne in the fourth quarter of 2016, averaging $4,824 for the year.
Analysts expect the annual average to rise to $5,120 in 2017.