No political impetus and high supply from China weigh on Copper price – Commerzbank

Base metal prices remained under pressure this week: the Copper price slipped below $9,400 per ton yesterday. After all, market participants had to face some price-dampening news, Commerzbank’s commodity strategist Carsten Fritsch notes.

Copper stocks continue to rise

“The communiqué following the Third Plenum of the Communist Party in China was generally considered as vague. Some interpreted the emphasis on high-quality and innovative growth as a willingness to accept a slower pace of growth. Essentially, this indicates a continuation of the previous guidelines and there were no major surprises.”

“According to China's National Bureau of Statistics, refined Copper production rose slightly again in June and was therefore 3.6% higher than the previous year. This means that the correction, in the course of which Copper production had declined somewhat following the strong growth rates before, did not continue.”

“China's customs authority reported record-high exports of unwrought Copper and Copper products for the second month in a row in June. This indicates weak domestic demand. Copper stocks continue to rise: almost 230 thousand tons are now registered at the LME, 120% more than in May. Although Copper stocks on the Shanghai Future Exchange are no longer rising, they remain at a high level.”