Despite falling prices, which have pushed as much as a tenth of the world’s copper miners into the negative, the drop has not been severe enough to trigger supply cuts, Reuters reports. [ETF Chart of the Day: Copper Call]
Last year, Deutsche Bank also cut its copper projections due to weak Chinese demand. DB also expects rising supply in 2016 on new mine commissions, which could cause copper to “remain vulnerable to periodic bouts of ‘shorting.’”
“Weak demand in China will keep copper trapped in a bear market through 2018, Goldman analysts wrote in a Feb. 8 report. The bank forecasts that a global surplus of the metal will grow to 665,000 tons this year, from 339,000 tons last year,” according to Bloomberg.
iPath Dow Jones-UBS Copper Subindex Total Return ETN