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

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February 2019 | Base Metals


Copper: Rebound set to continue


Copper has strengthened slightly alongside the rest of the base metals complex since the start of the year, driven by a modest improvement in macro sentiment. This comes after a sell-off of 19% last year, which was primarily owing to macro tensions, namely the US-China trade tiff and the Fed’s tightening. Copper’s tight fundamental backdrop was not sufficient to offset the selling pressure stemming from negative macro flows, but we maintain the view that prices will appreciate over the course of this year, re-aligning with their robust fundamentals.

In this week’s analysis, we intend to highlight the most important (positive and negative) aspects of the copper market, which either shaped the vagaries of copper prices over the past year or will influence the outlook for this year.

Positive aspects

The ICSG estimates that the refined copper market was in a deficit of 545,000 tonnes in the first ten months of 2018, which was mainly the result of a constrained growth in refined output (+1.2% year on year), due to an unexpectedly high number of smelter disruptions, especially at Vedanta’s Tuticorin. The deficit was exacerbated by an acceleration in consumption...

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