Research

Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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January 2019 | Base Metals


Copper: Short covering


Copper prices experienced a strong rally on Friday, confirming our view that speculative positioning had become overly bearish. We see more short-covering rallies ahead on further gradual improvements in macro sentiment and renewed buying in Q2 when physical demand picks up and the fundamentals tighten at a faster pace. In this week’s analysis, we focus on China’s refined copper demand by reviewing the main downstream copper sectors.

In this week’s analysis, we focus on China’s refined copper demand by reviewing the latest data and developments in the main downstream copper sectors.

Power (~52% of Chinese copper demand): Power source investment contracted by 19.6% year on year in December, according to our calculations based on NBS series, and by 6.2% in the whole of 2018. However, power grid investment expanded by 26.8% year on year in December (a 5th straight month of increase) and was flat in the whole of 2018 due to a contraction of ~17% in January-July 2018.

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