Commodities: industrial metals resume rising trend
The consolidation of industrial metals in March was short-lived and prices resumed their rise in April. The price of copper rose significantly by over 10% last month and is approaching the historically high price of USD 10,000/ton. Likely, a speculative component is also responsible for the boom. But global demand for copper is booming, as metal plays a critical role in sustainable energy such as electric vehicle batteries and the storage and transport of renewable energy. Each electric vehicle contains over 80 kg of copper, as opposed to about 20 kg for a conventional car.
After some weakness in March, the Brent oil price rose in April. At the beginning of the month, OPEC+ announced its intention to increase production by 350,000 barrels per day from May onwards. Production restrictions will also be further reduced in June and July. Despite a weaker-than-expected first quarter for oil demand, both OPEC and the International Energy Agency still (slightly) raised their forecast for demand in 2021. Nevertheless, Saudi Arabia remains cautious. India and Japan are the third and fourth-largest crude oil importers in the world, respectively, and are experiencing a surge in Covid infections. The negotiations between the US and Iran on restarting the nuclear deal, which could lead to the lifting of sanctions against Iran, are also being watched. The weaker dollar also underpinned the price of oil.
The price of gold recovered slightly in the past month, finding support in lower US interest rates and the weaker dollar.