May 2012 | Base Metals
$7,500/tonne before bargain hunters arrive: Copper - Market Analysis
Despite tightness in the spread and falling LME stocks, copper at last seems to be experiencing a bit of a reality check. Technically, the move below $7,885/tonne now suggests prices may work down towards $7,500/tonne in the short term. However, there will be pent-up demand as prices fall, and bargain hunters will increasingly start to emerge as the risks subside, because copper’s bullish longer-term fundamentals remain intact.
Drawdown of SHFE stocks driven by small demand improvements
In China, SHFE stocks recorded their fifth consecutive week of decline. Stocks peaked back in mid-March at just short of 230,000 tonnes following several months of strong arbitrage buying and week domestic physical demand. Most of the recent withdrawals have come out of the tax-paid stockpiles, which would imply that these are metal units being consumed by...
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