Tensions on the Copper market – Commerzbank

According to the International Copper Study Group, the Copper market slipped from a supply surplus to a supply deficit of 50 thousand tons in April, Commerzbank's Head of FX and Commodity Research Thu Lan Nguyen notes.

Copper stocks on the LME have recently seen strong outflows

"The downward trend from the previous month has thus continued. Overall, however, there was still a supply surplus of 233 thousand tons for the first four months, almost unchanged from the previous year. However, if the trend of the last two months continues, the surplus is likely to melt away quickly."

"The ICSG recently predicted a surplus of almost 300 thousand tons for the year as a whole. This would require the supply situation to improve again in the coming months. The latest reports that Chinese Copper smelters want to increase their exports in order to replenish the LME's stocks at least indicate that supply is not yet too tight."

"However, such concerns are likely to persist as long as the import pull from the US continues due to fears of US import tariffs on Copper. This is the main reason why Copper stocks on the LME, as well as in China, have recently seen strong outflows."