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

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June 2019 | Base Metals


Copper: Positioning becomes excessively negative


Despite a weaker dollar since the start of June, sentiment toward copper continues to deteriorate as increased US-China trade tensions undermine the forward fundamental picture. As we believe that the market is forming an excessively negative view on the copper fundamentals, we think that copper prices are prone to a robust short-covering rally in the near term. But a (macro or fundamental) catalyst may be needed to trigger this positioning reversal.

Prices near their year-to-date low
Copper prices are hovering near their 2019 low of $5,725 per tonne, having tumbled roughly 13% over the past two months. While the depreciation in the dollar over the past week (stemming from a more dovish Fed, willing to cut rates if needed) offers some support to copper prices, investor sentiment is still undermined by the ongoing trade/tech war between the US and China and its resulting negative impact on China’s risk appetite.

The dampening of investor interest in the copper industry was one of the key themes highlighted at last week’s...

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