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

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October 2019 | Base Metals


Copper: Short-covering still likely in Q4


Copper prices have underperformed since the start of October, in part owing to an abruptly large inflow into LME warehouses. While global refined copper production growth could rebound in Q4 due to mildly easier concentrate supply conditions, we expect global refined copper demand to grow at an even stronger pace due to an acceleration in Chinese consumption. As the refined copper market should post a deeper deficit in Q4, we remain of the view that copper prices are vulnerable to an earnest short-covering rebound in the coming months.

Copper prices undermined by a large one-off delivery into LME warehouses
Copper has performed relatively poorly compared to most of its base metal peers since the start of October, due to a sharp net inflow of 36,175 tonnes (+14%) into LME warehouses on October 1. LME nearby and longer-dated spreads have loosened so far this month, pointing to weaker refined market conditions. With China on Golden Week Holiday (October 1-7), copper was vulnerable to the downside at the start of the month.

Global refined output growth could rebound in Q4

Global refined output contracted by 131,000 tonnes or 1.1% year on...

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