The copper prices are on the rise and have gained around 15 percent this year so far. The metal is also known as Doctor Copper as it is believed to be an indicator of what the economy is doing.

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Copper's wide industrial use helps us to know the health of the economy, and the increasing price of copper is a sign that the global economy is recovering, experts say.

The prices of industrial commodities have been rising on the back of buoyant demand after the pandemic-hit economies opened up their industries. Copper prices rose above $9,000 per metric tonne on the London Metal Exchange (LME) earlier this year.

“Weak US dollar and expectations of rising metal demand from the US after its recent massive stimulus package for infrastructure plans lifted the metal prices. Additionally, supply woes are also keeping copper prices elevated,” said Ajay Kedia, Director, Kedia Advisory.

As per data from the satellite surveillance of copper plants, global copper smelting in March 2021, plunged to a record low in about 5 years on a similar narrative.

Even the top copper-producing nation, Chile, announced the closure of its borders in an attempt to slow the spread of the coronavirus as cases climbed past 1 million.

“Despite the resurgence of the implacable virus, LME Copper prices have continued to hover around $9,000 per tonne levels on the back of a fairly tight Copper market. The supply chain for copper, widely used in the power and construction segment, has been threatened due to the pandemic triggered curbs amid strict environmental norms in China,” said Yash Sawant, Research Associate, Angel Broking.

However, a persistent rise in the LME inventories coupled with weaker demand prospects from top metal consuming nations, China, kept a lid on the red metal prices, Sawant added.

Going ahead, markets are expected to have a keen watch on China’s import and export data for the month of March’21 due later in the week.

The warehouse stock for Copper at LME was at 157,075 mt that is up by 6,750 mt.

“The trend in copper prices remains positive. On MCX, copper prices are expected to test Rs 702 per kg soon,” Kedia said.

Rising copper prices have a huge impact on the Indian economy as it next only to aluminum and steel in terms of their widespread use in sectors such as construction, telecommunications, transportation, consumer durables, and automobiles.

According to the government data, India’s refined copper imports increased to 1.52 lakh tonnes (lt) in 2019-20 from 44,245 tonnes in 2017-18, while exports declined to 36,959 tonnes in 2019-20 from 3.78 lakh tonnes in 2017-18.

There was a net import of 44,373 tonnes and 1,15,005 tonnes in 2018-19 and 2019-20, respectively, against net exports of 3,34,310 tonnes in 2017-18.