Commentary: Copper’s robust dynamics clash with futures gloom – by Andy Home (Reuters U.K. – September 26, 2018)

LONDON (Reuters) – You’ve got to feel sorry for Doctor Copper. He and his base metal friends find themselves on the front line of the escalating trade stand-off between the United States and China.

London copper has clawed its way back from August’s 13-month low of $5,773 per tonne but at a current $6,280 is still 15 percent off its June peak of $7,348. With the exception of that other front-line commodity, soybeans, the rest of the commodities universe seems to be relatively unaffected.

The oil market is positively bubbling away, while iron ore and steel prices remain surprisingly resilient to the prospect of a full-blown trade war between the world’s two biggest economies. There is, however, logic to the punishment meted out to Doctor Copper.

Trade wars, the reasoning goes, mean lower global growth down the line. That’s bad for copper usage. Particularly, if growth in the world’s largest user of the metal, China, is hit as well, which seems more than likely.

A stronger dollar and ominous signs of stress in emerging markets such as Argentina and Turkey top up the bearish cocktail. Doctor Copper, seen this way, is signalling that we should be worried about where global manufacturing is heading.

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