Copper price surges to 32-month high as hedge funds place $20 billion bet. Supply side issues are forcing copper prices to levels not seen since 2013 as hedge funds bet long (future prices higher).
This has to be a short term feature as mining companies scramble to increase output, but will cause headaches for copper buyers around the world.
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Copper has slowly climbed back to April 2017 prices while stocks have stayed around 300 kT since August 2016 with a 50kT cycle.
In the absence of any major national infrastructure initiatives I do not see any significant increase in demand but there appears to be ongoing supply issues as governments in ore mining countries renegotiate export licenses, which may push prices higher in the short term. long term I still think that the LME price will fall off to nearer £ 4 / kg
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The price of LME copper seems to have stabalised at around £ 4.50 / kg after May’s dip tp £ 4.20 / kg.
Interesting to see that LME copper stocks have recovered to over 300 kT after dropping to 240 kT during June. To me this indicates that supply is able to keep pace with demand and that we could be in a period of relative price stability with production compensating for changes in demand.
Increased infrastructure demand from China pushes stocks lower and prices higher.
Weak demand and improved supply has pushed the price of copper back down to where it was last November. The increase is stock levels means that the price is likely to continue falling.
My long term projection for the price of copper is still £ 4.00 / kg but I expect the price to fall lower than that until supply is cut back and stocks drop back under 300 kT.
Ongoing issues with the Trump administration will delay and potentially reduce the amount of infrastructure spending in the USA and related demand for copper.
The price of copper is now down to where it was last November and I still expect it to fall to GBP 4.00 / kg unless there is a significant upturn in the world economy.
The relative stability of the stock levels indicate that traders are happy with the stock that they have, just not happy about taking on a load more stock !
The price of copper has been holding steady since last November while stocks have jumped around, now back to where they were last November.
The price of copper is still relatively high compared to historic values so I expect the gradual decline since February to continue until copper reaches £ 4.00 / kg. Unless there are significant supply side issues or demand issues or GBP currency issues.