Copper trapped between old and new super-cycles – by Andy Home (Reuters – August 23, 2023)

LONDON (Reuters) -Copper may be poised to embark on a new energy transition super-cycle but it is currently struggling to escape the gravitational pull of the old Chinese super-cycle. China has been the core driver of copper pricing over the last two decades as the country built new cities and rolled out the infrastructure needed to power them.

Booming domestic demand for industrial metals was coupled with rising exports of manufactured products as China became the world’s workshop. The twin engines of China’s previous spectacular growth are now stuttering as a property bubble deflates at home and high inflation weakens demand for its products abroad.

The London Metal Exchange (LME) three-month copper price has been oscillating in a $7,800-8,870 per metric ton range since May as old and new price drivers compete. Fund positioning on both the LME and the CME is equally caught between a waning China-centric super-cycle and the nascent green super-cycle.


Money managers flipped back to net short of the CME copper contract at the start of this month in a continuation of the positioning chop that has characterised the market since March.

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