…. as the red metal is expected to hit $7,720 in 2019
By BUUMBA CHIMBULU
RISING copper prices signify that the Zambian economy is headed for a more positive growth this year with projected Gross Domestic Product above 3.5 percent, says economist Lubinda Haabazoka.
Dr. Haabazoka, an economist, said the prevailing high copper prices meant that the economy would rebound in 2018 and 2019 respectively.
“This is something we should be happy about because looking at the trends around the world and what has been obtaining in Zambia, negative outlook was passed on Zambia’s economic growth but the indicators so far point to the fact we might the economy will pick up and eventually post a growth this year above 3.5 percent,” he said.
He, however, said in an interview that the economic rebound would also be supported by other drivers of the economy such as retail and agriculture sector despite the poor rainfall pattern.
“Because of the positive outlook on the metal market, Zambia’s economy will grow above 3.5 percent this fiscal year,” Dr. Habazoka said.
Copper prices which have risen to US$7,312.50 in 2018 have continued with their positive performance with expectations that the prices will hit US$7,720 a tonne in 2019.
These prices are expected to rise to over US$7,280 a tonne in 2018 and US$7, 720 a tonne in 2019, against US$6,100 in 2017.
Analysts say China’s copper demand growth may be as high as three percent in 2018 from around two percent last year.
The metal started 2018 on a firmer ground with prices reaching a stage last seen in January 2014 after peaking at US$7,312.50 on December 28 2017.
Although the metal prices are currently trading at US$7,120.00 a tonne, the commodity is still holding firm on the London Metal Exchange.
According to Reuters, London copper was pushed higher on bets that demand in top consumer China will improve in 2018, keeping prices near four-year highs at the start of trading in the New Year.
According to Reuters data, the contract ended 2017 with an annual 31 percent price gain, reaching prices last seen in January 2014 after peaking at $7,312.50 on Dec. 28,
Analysts across the World expects global consumption of refined copper to increase by 2 percent in 2018 from last year while supply is seen to climb only by 1.3 percent.
Meanwhile, the Kwacha made a comeback against the dollar on Monday to see it close at K10.050 / K10.100 from its opening levels of K10.100 / K10.150.
Cavmont Bank Zambia indicated that the late gains posted by the local unit came on the back drop of increased supply from exporters who were selling to settle mid-month obligations.
“Despite the positive movement in the local unit, market activity was rather flat as most corporates; especially on the buy side traded the pair cautiously. The Kwacha is likely to gain further in the short-term should supply continue to outweigh demand,” said the bank.