The price of copper dropped on Wednesday as fresh worries about the banking sector shook the stock market.
When Credit Suisse’s largest shareholder indicated it couldn’t give the Swiss bank any more financial help, the world’s financial markets became uneasy.
In the Comex exchange in New York, copper for May delivery reached $3.84 per pound ($8,489 per tonne), down from Tuesday’s closing price.
According to Dan Smith, the research analyst at Amalgamated Metal Trading, “the dollar index was strong and also the European stock market has declined, with fears about the financial crisis being the main driver.”
Smith added that these effects were largely countered by optimism for Chinese demand.
China uses the most amount of copper for electrical wire and construction.
Despite headwinds from weak global demand and a slump in the real estate market, economic activity in China rebounded up over the initial 2 months of 2023 because spending and infrastructural investment pushed recovery from pandemic disruptions.
Because copper has had a reasonably robust start to the year compared to other base metals, Smith said copper prices are somewhat more vulnerable to economic and banking worries.