LONDON, July 29 (Reuters) – Funds have slashed their long positions on the copper market as high and rising inventories cause a collective re-think of the market’s short-term prospects. Investors rushed to buy copper during the second quarter, betting the metal would benefit from a turn in the economic cycle and a green energy demand booster.
The bull narrative was spiced with concern that supply simply wouldn’t keep up, creating yawning deficits and potentially explosive higher prices. The reality has turned out slightly different.
China, still the engine room of global copper demand, shows no signs of escaping its property drag. Copper stocks in the country are unseasonally high. Worse, Chinese smelters have been exporting large volumes to London Metal Exchange (LME) warehouses. LME inventory last week touched a three-year peak.
The LME three-month price has retreated from its record high of $1,104.50 per metric ton in May to the current $9,000. The bull party is on hold. For now at least. The consensus remains for higher prices later this year.
For the rest of this article: https://www.reuters.com/markets/commodities/funds-dump-copper-rising-stocks-dampen-bull-spirits-2024-07-29/