Copper stocks are approaching critically low levels – TDS

Copper must enter the LME to prevent legitimate fears of shortage, says Daniel Ghald, senior strategist of TDS raw materials.

Market expectations and real -time demand diverge

“The market has been surprised by the day of liberation; waiting for a sharp slowdown in demand, while our real -time estimates indicate that there is no evidence of a deceleration in the growth of the demand for raw materials. Meanwhile, the threat of tariffs of section 232 on copper has been absorbing copper inventories of the rest of the world, at the same time as the Chinese collection has further exhausted global inventories.”

“Now, as the inventories of the LME have reached critically low levels, the time differentials have expanded, which should encourage the back of the return to the system. Curiously, the expectations of Chinese copper exports have arisen in recent weeks, but these have not yet reached the LME warehouses. Shanghai merchants have been offering copper in the Shfe.”

“If the metal does not return imminently to the system, the legitimate fears of a 2021 -style shortage will emerge again. The large -scale purchase activity of CTA in the last sessions has supported flat prices as we expected, but the algorithms are vulnerable to a remarkable sudden movement in a great fall. In the short term, we expect a remarkable purchase activity of CTA in zinc and lead.”