Research

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

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July 2019 | Base Metals


Copper: Maintaining our bullish H2 outlook


While copper prices have started Q3 on a relatively weak note amid a stronger dollar, we think that Chinese demand for the metal is due to increase in the months ahead, coinciding with supply conditions becoming increasingly tight. As this should underpin a further drawdown in domestic and global copper inventories, we believe that the downside from current spot price levels is limited. Although an escalation of the US-China trade dispute remains an omnipresent risk, we hold that the 2019 price low is behind us.

Off to a weak start to July...
Despite an increase in global risk-taking appetite since the start of July fuelled by rising expectations for additional monetary policy easing among major central banks, copper is off to a weak start this month, alongside the rest of the base metals complex. We attribute copper’s weakness mainly to a firmer dollar (DXY: +1% month to date), especially against the Chilean peso, which exhibits a strongly negative correlation with copper prices because Chile is the world’s largest copper mining country.

...after big LME stock rises

Sentiment toward copper has also...

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