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Fundamentals To Depress Copper Prices Despite Strong Start This Week

Metal News - Published on Thu, 13 Jun 2019

Image Source: Winton
SMM reported that despite rebounds in Shanghai copper prices in the week to June 11, SMM retains a bearish outlook on copper prices in June as an approaching low season will further weaken consumption while output recovers. SMM expects the most-active SHFE August copper contract to face pressure from the CNY 47,500 per tonne level in the short term.

The August copper contract rebounded for two consecutive trading days as of Tuesday June 11, by some 2%, after it fell to a two-year low, below the CNY 46,000 per tonne level last Thursday.

The rebound was driven by improved macroeconomic sentiment following the US-Mexico agreement to avert a tariff war. The US dollar dropped on disappointing nonfarm payroll data last Friday, and this also eased pressure on copper prices.

Output recovery from maintenance across copper smelters will keep the domestic market well supplied in June. SMM data showed that China’s production of copper cathode is expected to recover to 704,900 tonne in June, up 71,400 tonne from May.

Amid an open import arbitrage window, seaborne copper materials continued to move into the domestic market, as evidenced by falling copper inventories across Shanghai bonded areas. This is also set to grow pressure on copper prices in the short term.

Source :

Posted By : Rabi Wangkhem on Thu, 13 Jun 2019
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