Research

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

Change font size:   

September 2018 | Base Metals


Copper: The pain is almost over


LME copper prices have remained depressed below $6,000 per tonne so far in September. However, we reiterate that the weakness is essentially driven by macro fears, prompting a broad-based deleveraging across risk assets, especially copper – one of the most risk-sensitive base metals. Since we expect macro tensions to abate, we still envisage a solid rebound in copper prices in the months ahead because the positive forward fundamental picture should reassert itself.

Week in review
The LME copper price sold off 1.8% last week to close at $5,880 per tonne as of September 7 amid broad-based downward pressure across the base metals complex; the LMEX fell 1.6%. The fall in open interest in LME copper suggests the price weakness was principally attributable to long liquidation, which is consistent with the loosening of the cash/three-month contango from $7 per tonne to $18 per tonne over the past week.

The SHFE copper price dropped relatively less, by 0.8% last week, principally because Chinese domestic prices were supported by the depreciation in the yuan. However, the open interest in SHFE copper ticked higher, suggesting that Chinese traders added new shorts to the market.

ACCESS RESTRICTED

You must be a paid subscriber to view the full content.
Content over 60 days old can only be accessed by subscribers.
Call +44(0)20 7779 8000 with your credit card details or subscribe online.


SUBSCRIBE


Receive unlimited access to all current and archive content going back to 2008 including downloadable pricing data and forecasts. Plus download the latest issue as soon as it’s published.

Subscribe


Already subscribed?