Trump tax speculations and strike in Chile push copper to highest since 2014

Copper rose to the highest level since 2014 in the Asian trade, led by buying in China. In the Asian hours, the copper price jumped to as high as yuan 50,300 per ton, $7306.8 per ton in the London metal exchange, and $2.823 per pound in CME. The price of copper had closed 4.6 per cent higher on Friday in London after the Australian miner declared force majeure on copper shipments from Escondida, which accounted for 6 percent of global output in 2016.

In addition to that, the price of copper has been benefiting from President Donald Trump’s vow to increase US infrastructure spending. Though the actions of Mr. Trump so far, strongly suggests that he is likely to continue to do what he promised, there are uncertainties with regard to exact policies, which h is likely to continue for a while.

Data from China suggest that the economy is in much better shape than expected. China surprised in January with better than expected trade data. In January, yuan-based imports rose by almost 16 percent, which is good news for copper as it is the largest importer of the red metal.

We suspect that the copper would rise further and beyond $3 per pound. Copper is currently trading at $2.79 per pound.