Capital is considered a measure of the health of the economy, the bronze market has been under pressure from macroeconomic factors and the prospect of negative needs since the beginning of June this year. However, November is witnessing the potential recovery of the dong price after a continuous period of passing. This makes the market a big question that this price increase trend is sustainable in the near future?

The motivation behind the recovery of the dong in November
The bronze market entered the second half of the year, which lost about 30% of the value in just over 1 month, and constantly failed to find the motivation to recover until the end of October. Forcing the interest rate increase of a series of central banks in the world to restrain continuous inflation, which weighed on the demand for copper for production. In addition, the leading consumer countries in the world are also facing their own challenges.
If China, the market consumes more than 50% of copper in the world struggling with the problem of disease control and weak real estate field, then the country has the second largest demand in the world and Japan. The village must also face the sloping of the yen and the difficulties in stimulating economic growth. With the major economic locomotives in the world suffered from significant pressure, the price of the dong could not find a clear recovery trend.

However, since November up to now, the bronze market is showing some signs of prosperity. According to the Vietnam Commodity Exchange (MXV), at the end of the trading session on November 16, the MXV-Index metal decreased by 2.18% to 1,745 points, but previously recorded a series of 6-point increase. next. One of the great contributions to this momentum is the recovery of the price listed on the Comex Department, the most traded item in the metal group. At present, the price of the Comex is 8,351 USD/ton and is at the highest price area within nearly 3 months.

One of the main motivations that promote the price of the copper recently is the market expectation that the US Federal Reserve (Fed) will slow down the process of monetary tightening, in the context of inflation showing the seal. cooling signal. The US CPI consumer price increased slowly from 8.2% in September to 7.7% in October compared to the same period last year, defeating the expectation of 8.0% of the market. Meanwhile, input inflation through the new October PPI production price index was announced by 8.0%, lower than an increase of 8.4% in the previous month.

In fact, Fed officials are also gradually expressing their views that the next meetings are likely to aim for smaller interest rates. Although the increase in loan costs will still put pressure on the economy and thereby, the demand for copper for production activities will be affected. However, slow growth can facilitate the market to have adaptation time and the Fed will also have more options to regulate and balance the growth and inflation. Currently, the US Dollar has fallen to the lowest level in the past 3 months, which will be a support factor for the price due to the loss of costs.

Many barriers are still surrounded, the recovery of the copper price is relatively slow
According to Mr. Pham Quang Anh, Director of Vietnam Goods News Center: “The metal market in general and the bronze market in particular is likely to continue recovering in the coming period when the macroeconomic pressure gradually diminishing. However, the increasing trend may be slow, when the demand in China will still be a difficult problem because the disease continues to be complicated. ” In fact, the number of Covers infections in China has now surpassed 20,000 people, the highest level since April this year, and is the biggest barrier to the economic picture in this country.
Difficulties expressed through a series of poor economic data in October, with Chinese retail sales fell for the first time since May, with a decrease of 0.5% compared to the same period last year. The weak consumer confidence will also cause the production activity to lack the motivation to expand, thereby negatively affecting the needs of important input materials such as copper items. China’s industrial output growth also slows down with an increase of 5% from 6.3% in September, lower than estimated on average at 5.2%.

However, unlike the previous period, the market is expecting China to gradually loosen the non -Covid policy, especially when the government of the country conducts a few rules of isolation. In November, the price of Dong also received significant motivation to this belief, despite the number of Cover-19 infections are still constantly increasing.

In addition, the macro factor is recognized will bring more positive motivation to the price of the dong in the next few months. The US retail data announced by the Ministry of Trade last night showed a growth of 1.3% in October compared to the previous month, the largest increase since January this year. Inflation cools down, while consumer activities are still strong, it will promote belief that the world’s largest economy may avoid risks of a recession. In general, the potential challenge will still make the price record the level of adjustment decreases, but the opportunity door is more open than the previous period, and therefore, the recovery trend will still dominate.

Source: Hong Hanh/ Vietnam Commodity Exchange (MXV)

T&G Import Export Joint Stock Company

Address: 352 Hue Street, Le Dai Hanh Ward, Hai Ba Trung District, Hanoi

Hotline: 02473010868

Email: hrm@tginterjsc.com

Website: http://tgimportexport.com