LONDON, Aug 20 (Reuters) – A rare burst of Chinese exports has deflated bull spirits in the copper market, with funds dumping long positions and prices down by 16% from the record highs seen in May. The world’s largest buyer of copper shipped out an unprecedented 158,000 metric tons of refined metal in June. First-half exports of 302,000 tons were already higher than any full calendar year since 2019.
This break of normal trade patterns has punctured a bull narrative of constrained supply and cyclical demand recovery. Weak Chinese purchasing managers indices show that activity in the country’s manufacturing sector sank to a five-month low in July, reinforcing Doctor Copper’s gloomy message.
Yet demand weakness is only part of the story. Fast-rising domestic production and a flood of African imports have saturated the local market. And then a ferocious squeeze on the CME contract in May opened an equally unusual export arbitrage window for that excess to flow out.
For the rest of this article: https://www.reuters.com/markets/commodities/chinas-rare-copper-export-boom-signals-more-than-weak-demand-2024-08-20/