Yahoo Finance Why Did Copper Weaken as Oil Prices Fell?
Doha Meeting: How Did It Impact Oil, Copper, and Gold?
Copper weakened on April 18
On April 18 there was weakness in copper prices due to a fall in oil prices. The disappointing outcome of major oil producers’ meeting in Doha on April 17 pulled oil prices lower and weakened the sentiment around copper. At 7:45 AM EST, copper traded at $2.14 per pound—a loss of 0.46%.
Positive sentiment from China
In the week ending on April 15, copper gained in four out of five trading days. It rose 3.2%. This is the biggest weekly gain for copper in the past six weeks. Last week, positive Chinese economic data supported copper prices. There were better-than-expected Chinese exports released in the middle of the week. This pushed copper and brought the prices higher. Read Why is Copper Trading Higher? to learn more.
At the end of last week on April 15, China reported its first quarter GDP as 6.7% year-over-year—the slowest economic growth in China since 2009. Despite the weak GDP, better-than-expected industrial production, fixed asset investment, and new home prices supported the positive sentiment to an extent. In the last month, new home prices rose in 62 of 70 Chinese cities—compared to a rise in 47 cities in February.
Sentiment remains mixed
On April 18, copper prices also got support from supply disruptions in two major copper mines in Chile due to heavy rains. El Teniente and Los Bronces are two of the world’s largest copper mines. They shut down temporarily. These mines are owned by Anglo-American and Codelco. They produce about 880,000 tons of copper per annum. The sentiment remains mixed. It’s weak due to the oil decline. This has the potential to impact the prices of copper producers such as Freeport-McMoRan (FCX), Glencore (GLNCY), Rio Tinto (RIO), BHP Billiton (BHP) and base metal ETFs like the SPDR S&P Metals & Mining ETF (XME).
Next, we’ll discuss the performance of gold on April 18 and the reasons behind the sentiment.
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