{"id":1134184,"date":"2019-08-22T15:53:16","date_gmt":"2019-08-22T20:53:16","guid":{"rendered":"https:\/\/www.mining.com\/?p=1000049"},"modified":"2019-08-22T15:53:16","modified_gmt":"2019-08-22T20:53:16","slug":"copper-price-bears-overlooking-decent-fundamentals","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1134184","title":{"rendered":"Copper price bears \u201coverlooking decent fundamentals\u201d"},"content":{"rendered":"<p>The price of copper came under pressure again on Thursday amid worries about a global economic slowdown, particularly in manufacturing, vital to overall demand for the bellwether metal.<\/p>\n<div class='d-flex justify-content-center'>\n<div id='div-gpt-ad-1561499308230-0'><script>googletag.cmd.push(function() {googletag.display('div-gpt-ad-1561499308230-0');});<\/script><\/div>\n<\/div>\n<p>In early afternoon trading in New York, copper for delivery in July was at $2.5475 a pound ($5,615 a tonne), not far off levels last seen in 2017. <\/p>\n<figure class=\"wp-block-pullquote alignright\">\n<blockquote>\n<p>&#8220;We expect the copper market to be in deficit this year and as a result prices look oversold relative to fundamentals&#8221;&nbsp;<\/p>\n<p><cite>Oxford Economics Commodity Price Forecasts August 2019<\/cite><\/p><\/blockquote>\n<\/figure>\n<p>Trade worries have dogged copper price bulls for the better part of a year, but more recently weak data from China, the US and Germany, the world&#8217;s top three consumers of industrial metals, has intensified the sell off. <\/p>\n<p>The US manufacturing purchasing managers index (PMI) fell to below 50 today, the lowest reading since 2009 and the first sign that slowing growth in the sector may be turning into outright contraction of activity.<\/p>\n<p>China, which imports more than half the world&#8217;s copper, posted the weakest industrial output growth in 16 years in July (although at 4.8% expansion year-on-year, still the envy of developed economies), while the month before German industrial production registered its biggest annual decline in nine years. <\/p>\n<p>A <a href=\"https:\/\/www.oxfordeconomics.com\/commodity-price-forecasts\">new report by Oxford Economics<\/a> argues that the copper market&#8217;s &#8220;decent fundamentals are getting overlooked amid the gloomy backdrop for financial markets&#8221;:<\/p>\n<blockquote class=\"wp-block-quote\">\n<p>The latest Copper Study Group data flagged up a 1% fall in global copper mine production in the first four months of 2019. Also, copper is constrained by a weak global pipeline of mine projects, and production in Chile was down 1% y\/y in both May and June, partly due to strike action. <\/p>\n<\/blockquote>\n<blockquote class=\"wp-block-quote\">\n<p>Spot treatment charges (which fall during periods of tightness) are currently down 37% y\/y. <\/p>\n<\/blockquote>\n<blockquote class=\"wp-block-quote\">\n<p>We expect the copper market to be in deficit this year and as a result prices look oversold relative to fundamentals.&nbsp;<\/p>\n<\/blockquote>\n<p>In another sign of underlying weakness in demand, global copper inventories have been rising steadily after hitting four-year lows in January.  Stocks in London Metal Exchange supervised warehouses around the world jumped by 11% over just the past month.  <\/p>\n<div class=\"wp-block-image\">\n<figure class=\"alignright\"><img decoding=\"async\" src=\"https:\/\/www.mining.com\/wp-content\/uploads\/2019\/08\/oxford-economics-copper-price-bears-overlooking-fundamentals.jpg\" alt=\"\" class=\"wp-image-1000075\" srcset=\"https:\/\/www.mining.com\/wp-content\/uploads\/2019\/08\/oxford-economics-copper-price-bears-overlooking-fundamentals.jpg 564w, https:\/\/www.mining.com\/wp-content\/uploads\/2019\/08\/oxford-economics-copper-price-bears-overlooking-fundamentals-300x245.jpg 300w\" sizes=\"(max-width: 564px) 100vw, 564px\" \/><figcaption>Oxford Economics Commodity Price Forecasts August 2019<\/figcaption><\/figure>\n<\/div>\n<p>Copper stocks have been rising even as stockpiles of other industrial metals, notably zinc and aluminum shrink, and Oxford Economics says &#8220;most metal traders attribute the anomalous behaviour of copper as being driven by inventory relocation rather than genuine market weakness.&#8221;<\/p>\n<p>The Oxford Economics house view is for the copper price to average  around $5,870 a tonne in the fourth quarter this year and climb back above $6,000 early in 2020.  <\/p>\n","protected":false},"excerpt":{"rendered":"<p>A new report forecasts recovery in price on the back of a fall in global copper production, a thin project pipeline and misreading of inventory build-up.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center 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