Copper: short-term recovery, but long-term uncertainty!
13 February 2020 | by Yvan Berthoux
Growing uncertainty around the coronavirus has led to sharp downward revisions in growth expectations in China and thence to the collapse in some commodity prices such as oil and copper. While real GDP growth was expected to flirt with the 6 per cent level before the Covid-19 pandemic, sell-side institutions have marked down their forecasts of economic activity to a mere 1 percent pace in the first quarter in the base case. Worst case scenarios extend to a 4 per cent contraction if Covid-19 is ‘not contained’. A sharp recovery in copper prices should accompany a normalisation of activity, but the longer-term outlook is cloudy.