Thu Lan Nguyen, Commerzbank’s Head of FX and Commodity Research, noted that the Copper price only briefly surpassed the $11,000 per ton threshold.
Potential for Further Copper Price Correction Downwards
“Weak economic data from China and news of a partial resumption of operations at Indonesia’s significant Grasberg mine have dampened Copper’s price momentum. Although China’s industrial production grew year-on-year, its pace has decelerated compared to previous months. This trend also applies to metal production, which, in isolation, would typically be positive for Copper prices.”
“However, this is offset by weak domestic demand. Specifically, a renewed downturn in the real estate market is clouding the demand outlook. The combination of strong production and soft domestic demand implies that China is likely to export more metal. Industry sources, as reported by Reuters, corroborate this, estimating October Copper exports to have exceeded 100,000 tons, which would push total exports this year to a record high.”
“Another contributing factor is the elevated LME Copper price, which incentivizes increased exports. Despite this, inventory developments only show a marginal rise in supply from China, with stockpiles beginning to increase slightly again since the start of this month. Should this trend persist, it is likely to support a further downward correction in the Copper price.”
