“The demand in the Chinese markets has not gone down, but China has started using its stockpiles of copper instead of importing the metal,” Commerzbank analyst Daniel Briesemann remarked. “But that will change, as recent data suggests that copper imports have increased over the last four months.”
“The fundamentals of copper are still relatively strong, there are a number of mines where production has declined,” stated independent consultant Angus MacMillan, according to Reuters. “But I don’t think the market will go much higher in the short term.”
“Looking at the demand side of the market, we really do not see support for current price levels,” said Neil Buxton, managing director of GFMS Consulting.
A tight market and delays in supplies, more notably from Chilean mines where protests halted production, have supported copper prices; however, “while most analysts mis-focus on Chilean supply problems, mine supply growth is actually rising at a growing rate, particularly from Africa and China,” according to Societe Generale. It estimates mining supply will grow by 5.2% this year.
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First Trust ISE Global Copper
Max Chen contributed to this article.