Although the copper price has now recovered somewhat, the numerous indicators of negative sentiment in the manufacturing sector have left their mark, says Carsten Fritsch, commodity analyst at Commerzbank.
Weak construction sector acts as a brake on copper
“Not only did sentiment in China deteriorate further – the Caixin index even fell slightly below 50 and thus back into the range signalling a contraction – but yesterday evening the ISM index in the US also disappointed and fell even more significantly below 50.”
“In addition, assessments by state-backed Chinese research group Antaike, which according to a Reuters report has forecast a fall in copper prices in the second half of the year, had a negative impact. After all, steady production growth in the copper refining industry is met with weak demand growth.”
“After a 5.3% increase in the previous year, demand in China is expected to grow by only 2.3% this year. The weak construction sector is acting as a brake. A global supply surplus of 300 thousand tons is expected in the copper market. Antaike was more optimistic on base metals aluminium and zinc. The highest price potential is seen for tin.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
