Copper Prices Skyrocketed On Weaker US Dollar

  • Sep 20, 2018 AEST
  • Team Kalkine
Copper Prices Skyrocketed On Weaker US Dollar

The fresh lap of the trade wars between the United States and China has not impacted as much which fueled the prices of the Copper. This relief is the result of the China’s decision to target lower value of the US goods. The Trump administration announced duties on the Chinese goods and has targeted significant amount ($200 billion) and China, in retaliation, has announced tariffs on $60 billion of US imports. Initially, the imports from China would be charged 10% duty however, later it might go up to 25%. However, lower-than-expected negative impact from the trade wars might not sustain moving forward as the US might levy duties on $267 billion of Chinese imports. The US President has been warning China to surrender otherwise they would face tariffs. According to estimates, if the US imposes more tariffs it could negatively impact the economic growth of the United States.

The metal prices witnessed a downward momentum in 2018 primarily because of the trade worries between US and China and the expectations that it could hamper growth as well as demand of the metals. The Trump administration’s move of protectionism might backfire primarily because China might foster domestic production which would reduce its dependency on imports. A fall in the dollar index has now pushed the copper prices. When dollar depreciates, other currencies holders’ find it cheap to purchase commodities. Copper price has now moved up to its highest level in three weeks (Benchmark copper was up at $US6121 on the London Metal Exchange (LME)).

A Look at Australian companies

Rio Tinto Ltd (ASX: RIO) has operations in Copper and the company supplies products to China, US and Japan. The company is classified as a leader in the production of diamonds as well as natural coloured diamonds. The company has operations into 2 diamond mines:

  • Diavik Diamond Mine (Canada)
  • Argyle Diamonds (Australia)

In H1 2018, RIO posted earnings before interest, tax, depreciation and amortization or EBITDA amounting to $9.2 billion while its operating cash flow stood at $5.2 billion. In the long-term, the company expects to witness higher demand in regard to its premium products as well as robust growth globally.

BHP Billiton Limited (ASX: BHP) has been working in petroleum, copper, coal, Iron ore and other assets. In the copper category, the company witnessed total revenues amounting to US$14.7 billion in FY2018 while its underlying EBITDA during the same period was US$6.9 billion. In FY2019, the company is expected to experience production in copper in the range of 1,675-1,770 kt.

With the changing trend, the copper based stocks might gain traction once again.

Dividend Stocks

Dividend Stocks To Buy

The Income available from dividends remains attractive for many investors.

We take a look at the best yields on the market and assess what they say about a company’s prospect.

One Thing is certain, though, Australia interest rates are still low, making income difficult to come by and keeping the focus for many investors on high yielding stocks. Kalkine’s team of analysts bought you handpicked report for “Top 25 Dividend Stocks For 2018.”

ASX-relevant Special Reports are published year-round to provide a detailed analysis into an investing opportunity or a potential risk to your portfolio.

Click here to get your free report.


Disclaimer

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

 

 

All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK