Fastmarkets analyst Boris Mikanikrezai and reporter Yasemin Esmen size up the copper market ahead of LME Week, which begins Monday October 11.
While copper had a good start to the year, benefiting from the broad reflationary trade that lifted all the metals, it has come under pressure since its peak in May mainly due to a deterioration in the macroeconomic environment.The peak in copper prices came at the same time as the United States dollar started to bottom out, and slightly after the G3 (China, US, Europe) credit impulse peaked. Weakening credit growth could be a headwind to copper prices from a macro perspective over the coming quarters.Fundamentally, copper has benefited from positive supply-demand dynamics. The tightness in the physical market and the high copper price environment have even led China to release some of its strategic copper reserves. In addition, Chinese authorities have issued warnings to domestic metal companies...