Although the Copper price has already recovered somewhat, the numerous poor sentiment indicators in the manufacturing sector left their mark, Commerzbank’s commodity analyst Carsten Fritsch notes.
Weak construction sector acts as a brake for Copper
“Not only did sentiment in China deteriorate further – the Caixin index even fell slightly below 50 and thus back into the range that signals a contraction – but yesterday afternoon the ISM index in the US also disappointed and fell further significantly below 50.”
“In addition, assessments from the Chinese, state-backed research group Antaike, which according to a Reuters report has forecast falling Copper prices in the second half of the year, had a negative impact. After all, steady production growth in the Copper refining industry is encountering weak demand growth.”
“After an increase of 5.3% in the previous year, demand in China is only expected to grow by 2.3% this year. The weak construction sector is acting as a brake. A global supply surplus of 300 thousand tons is expected on the Copper market. Antaike was more optimistic about the base metals aluminium and zinc. The greatest price potential is seen for tin.”
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