Copper price reaches its highest level in three months

The London Metal Exchange (LME) reported that three-month copper prices jumped to their highest level in more than three months. Copper reached $ 4,856 per tonne, the highest level since early November 2015, according to the LME's 3-month report. Rising hopes for a possible global economic recovery, coupled with a weaker US dollar, have pushed copper prices higher.

Prices have added more than 12 percent from the lows recorded during the third week of January this year. Nevertheless, analysts remain cautious about the possibility of further growth in the price of the metal.

According to an analyst at Commerzbank, only clear signs of an improvement in the economic situation around the globe can lead to further growth. The risks of falling metal prices come mainly from China. If the economic data of this country indicates a further slowdown, then stocks and all metals may come under even more pressure. China's demand growth slowed to nearly 2 percent, down from more than 5 percent in previous years. The country accounts for almost half of the world's copper consumption.

The surge in prices for copper and other base metals is mainly based on optimism about the measures to stimulate the Chinese economy. The market expects that the measures of Chinese politicians will be able to boost the country's economy.

Meanwhile, Codelco predicts a global copper surplus during 2016-2017. In its latest report, the world's largest copper producer expects copper prices to remain highly volatile. He expects prices to range from $ 2 to $ 2.10 per pound. In addition, the market will turn into a scarce market during 2018 and 2019. The market deficit is likely to be in the range of 50,000 to 100,000 tonnes in 2018. In addition, the deficit is set to grow further to 300,000 to 400,000 tonnes in 2019, Codelco says.