InvestorQ : I was told of the trump effect on copper prices. What is that?
Anushri Vasa made post

I was told of the trump effect on copper prices. What is that?

Answer
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seema Upadhyaya answered.
2 years ago


Like most precious metals and industrial metals, copper too peaked around the 2011-2012 period. Between 2012 and 2016, the copper prices almost halved as the global economic growth and industrial investments came under question. But above all, China which accounts for 50% of the world copper demand was actually seeing its growth slow below that of India. In fact, China has tried to shift from a production driven economy to a consumptions driven economy and that had resulted in a demand crunch for copper. However, the situation changed after mid-2016 and the price of copper has gained nearly 50% from the lows. During Trump’s presidential campaign, his election promises were predicated on a boost to consumption through corporate tax cuts and an investment of $1 trillion in infrastructure. Both these moves were expected to largely spur the demand for copper across the world. In addition, China has been seeing green-shoots of recovery and there is a massive investment that China is planning to modernize its national railways. It was this pent up demand that led to copper rallying sharply by nearly 50% in the last one year.