Copper: Supply setbacks push market into deficit – Commerzbank

Commerzbank’s Barbara Lambrecht notes Copper prices are rising again as ICSG data show a significant June deficit and a sharply reduced year‑to‑date surplus. Weak mine output outside China and Congo, production issues in Chile and the DRC, and rising cancelled LME warrants are fuelling supply concerns. The tightening balance underpins a more supportive price environment for Copper.

ICSG deficit and LME signals

"Prices on the copper market are rising again. One factor driving this uptrend is the latest data from the International Copper Study Group."

"According to this, the market was significantly undersupplied in June – by a good 85,000 tons after seasonal adjustment. As a result, the surplus in the first half of the year fell to just 32,000 tons."

"Adding to the concern is the fact that China’s copper production also faltered in July (we reported) and a Chinese mining company is likely to have to revise its production forecast downwards due to flooding in the Democratic Republic of the Congo."

"Furthermore, reports of cancelled warrants on the LME fuelled fears of a supply shortage. Although LME copper stocks have risen slightly, orders for withdrawals of LME copper have surged by over 50,000 tons."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)