Copper in a Silent Zone

Copper just recorded its first quarterly decline since 2015n++a sharp reversal by one of last years hottest assets that is fueling concerns among investors who look to the industrial metal as an indicator of global growth. Meanwhile, Domestic Copper has been performing quite lethargic in the daily trades. MCX Copper was trading at Rs 439.85 per kg, up 0.17%. The prices tested a high of Rs 442.1 per kg and a low of Rs 438.9 per kg.

Futures prices for the red metal shed 7.9% in the first quarter after hitting a nearly four-year high in late December. While other commodities such as oil have continued climbing, copper has lagged behind, hurt by lukewarm economic data from China and anxiety over possible disruptions to international trade.Because copper is used to build everything from electronic devices to houses, weaker global growth projections tend to curb prices. They are particularly sensitive to numbers from China, which accounts for nearly half the worlds copper consumption. Data from the country recently has shown slower manufacturing activity and a drop in copper imports.

Some investors also worry that U.S. tariffs on steel and aluminum and other levies against China could lead other countries to enact their own protectionist trade policies, leading to cautious activity by corporations world-wide. That could crimp demand for raw materials like copper. Data from the International Copper Study Group recently showed that copper usage only slightly exceeded demand for a fifth consecutive year in 2017, prompting some analysts to say that it is unlikely a supply deficit would buoy prices by much.

Copper prices remain 35% below their 2011 record, and some investors say seasonal weakness in the economic data early this year has created a buying opportunity for the metal. International Monetary Fund Managing Director Christine Lagarde recently reiterated the groups January forecast that global economic growth will accelerate in 2018 to its fastest pace in seven years.