Dr. Copper Gives the Economy a Clean Bill of Health

Dr. copper gives the economy a clean bill of health

“Dr. Copper,” so named for the metal’s ubiquitous use in many different applications, has been ripping higher since its 52-week low in March, thanks to a number of factors including promising economic data. Copper rose 12.24% in November, its best month in four years. Today it was trading as high as $3.52 per pound, or $7,679 per ton, its highest level since March 2013.

The rally is due in large part to higher demand from manufacturers in the U.S., China and eurozone. For the month of November, the IHS U.S. Manufacturing PMI hit 56.7, up significantly from 53.4 in October. The month-to-month increase was the sharpest since September 2014, according to IHS Markit.

China, the world’s largest consumer of the red metal, is forecast to be the only major economy to demonstrate growth this year, and earlier this week, the Organization for Economic Cooperation and Development (OECD) said it believes China will account for a third of all economic growth seen around the world in 2021.

Chinese factories signaled their strongest improvement in over a decade. The Caixin China General Manufacturing PMI posted 54.9 in November as output and new orders surged to 10-year highs. European factories also continued to expand, though at a slightly slower pace than the previous month.

Copper price has risen to a multi-year high on improved manufacturing activity
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Looking at manufacturers on a global scale, the data is just as strong. The JPMorgan Global Manufacturing PMI climbed from 53.0 in October to 53.7 in November, a 33-month high. According to JPMorgan economists, this marks the fastest pace since January 2018.

global manufacturing hit 53.7 in november 2020
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