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

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May 2019 | Base Metals


Copper: Still being undermined by macro negativity


The macro negativity stemming from the US-China trade/technology spat and softer China’s economic growth still threatens to push copper prices lower in the near term. Although they have managed to remain above $6,000 per tonne, an eventual break below this psychological seems likely in the coming days, which could elicit further speculative selling.

Poor macro dynamics
Although LME copper prices found some support at $6,000 per tonne last week, a break below this key level is likely imminently due to the macro negativity stemming from tense US-China relations. The re-escalation in the US-China trade and technology dispute has resulted in a confluence of macro headwinds for copper including a stronger dollar, a weaker yuan, and a reduction in risk-appetite.

In addition, the Chinese economy has shown signs of softening at the start of Q2, evident in the weaker-than-expected activity data for April, after a positive surprise in Q1. Given the deterioration in US-China trade...

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