The latest GDP growth updates show that the world's major economies remain in contraction (in year-on-year terms) at the end of 2020 and despite the roll-out of vaccines, the COVID-19 pandemic (and now its variants) remain with us, triggering stop-and-go snap lockdowns in most countries.
The lingering uncertainty provides fodder for a bearish narrative for the year 2021. Yet, equity markets are rallying. Wall Street continues to register fresh highs, pulling up 'the others' along with it, powered by fiscal and monetary policy largesse ... and FOMO (fear of missing out) and TINA (there is no alternative).
However, the rise and rise in copper prices suggest better health and wealth going forward. Factset figures show copper prices surged to an eight-year high of US$8,292 per tonne this year to date - a 7.1% addition to the 25.8% gain it notched up last year and a whopping 79.6% surge from the four-year low it plumbed in March 2020.
Because of the red metal's copious and pervasive use in industries - from car manufacturing to electrical goods to construction to solar panels, etc. - makes it a good contemporaneous (if not a leading) indicator of economic activity. Hence, the moniker Doctor Copper.
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China's - the world's biggest copper importer -- early return to growth in 2020 may have provided the impetus for the resurgence in copper prices. This is highlighted by the continued acceleration in Chinese industrial production - up by 7.3% in the year to December, the fastest rate of expansion in 21 months.
The good news is that the "good doctor's" prognosis is for continued strong growth in the global economy.
This is backed by, first and foremost, surrounding the COVID-19 pandemic. While the number of confirmed cases of infections continues to grow, the number of new daily cases and new daily deaths had been lessening, despite the advent of the new and more infectious variants.
Vaccinations would only improve these stats that, in turn, would allow a return to near-normal - lesser or the withdrawal altogether of social and business restrictions.
The rally in copper prices has also been driven by the US dollar's depreciation. The US dollar index (versus major currencies) has now fallen by 11.4% from the 17-year high it recorded in March last year - which, in itself, suggests greater investor confidence (i.e., lesser safe-haven purchases) in the revival of global economic activity.
Read our full COVID-19 news coverage and analysis here.