As news and speculation continues to swirl around potential domestic consumer-based stimulus to be announced at China’s third plenum in July, industrial metals prices have failed to generate material gains, notes Ryan McKay, Strategist Commodities Senior at TDS.
Physical demand for base metals is low
“Downside momentum has proven resilient despite these lingering hopes, as our commodity demand gauge continues to weaken amid a precarious global macroeconomic outlook.”
“Copper inventory levels continue to rise in China, while local premiums remain low, indicating little sign of physical demand to support the euphoric positioning in the West. Major SHFE traders have also recently liquidated their long positions and are now have taken a net short position overnight.”
“AUM for base metals-specific ETFs has also declined noticeably, while money manager positioning is also starting to reverse. CTA positions remain safe with a large margin of safety before the next sell-off trigger, however, as momentum wanes, the level is now approaching the market at $9,298/t.”
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.
