The spot copper price fell sharply at the beginning of the week. It dropped more than 1.3% to the edge of $ 5711 per ton. Fears of the second round of COVID-19 infections and the impact it would have on world demand for raw materials hit the prices. With the latest movements, the cost of copper continues to move away from its recent five-month high of $ 5928 reached on June 11.
Various cities in the United States were on alert for the past week due to the coronavirus outbreak. However, this morning, the attention of the market has been fixed in Beijing. The authorities of the capital have closed the neighborhood of a central market. A worrying rebound in the new infections was detected here. Fears of a second wave of diseases in the country have increased and shook the price of copper on the day, primarily due to the effect it would have on the demand for industrial metals.
On the other hand, industrial production in China grew 4.4% in May, negatively surprising investors who anticipated a 5.0% expansion. The macro data of the Asian giant, which had previously recovered drastically, served as a new reminder that the economic revival will be more gradual than expected.
With this in mind, the price of copper could deepen the falls in the coming sessions. Copper is considered a reflection of expectations about the health of the international economy. Therefore, if risk appetite continues to decline due to a COVID-19 outbreak, additional pullbacks in industrial metals such as copper are not ruled out.
From a technical point of view, the price of copper could widen the falls to $5518.6.
On the upside, buyers would have to break the area of the highs of September 2019 and June 2020 at $ 5928/5979. Then the $ 6210 level would be possible.