Listen to the latest market mood for the COPPER.

The fundamental outlook for copper remains positive and buyers should appear on pullbacks. There are supply issues, expectations for a weaker dollar, as well as the bounce back in global growth prospects on successful vaccine hopes.

Output has fallen. China’s refined copper output has fallen 5.3% in July from the previous month to 814K tonnes. The global copper smelting activity according to Reuters has fallen to its lowest level in more than two years based on satellite surveillance on copper plants. The total copper stocks in warehouses monitored by the LME were at their lowest levels since 2007, supporting prices Finally the weak US dollar on higher COVID-19 cases, some disappointing high-frequency data like jobless claims and high quantitative easing levels all support a weak USD going forward.

A weaker USD makes London Metal Exchanges priced in USD cheaper for holders of other currencies.

Therefore, expect copper to find buyers on pullbacks as long as this situation remains the same.

Trade Risks:

  • If we see strong USD strength enter the market that will invalidate this outlook.
  • If we see risk tone turn off that will also invalidate this outlook.