Copper: Tight supply supports breakout above $14,000 – ING
ING’s Warren Patterson and Ewa Manthey highlight that Copper has surged above $14,000 per tonne on the LME, driven by tightening physical conditions and strong prompt demand.
ING analysts Warren Patterson and Ewa Manthey report that copper prices have broken above the $14,000 per tonne mark on the LME, fueled by tightening supply conditions and robust demand. The LME's dwindling copper reserves, a deeper backwardation, enhanced speculative positioning, and persistent supply constraints all contribute to a favorable outlook.
Inventory levels have plummeted to multi-month lows, while the market has plunged further into backwardation, indicating a surge in demand for immediate shipments. This scarcity is especially pronounced outside the United States, where limited buffer stocks and continued exports to China have kept availability constrained. Copper's surge past the $14,000 threshold represents its highest level in two months, further underscoring the market's tight supply dynamics.
The improved speculative sentiment in copper and aluminum, with copper net longs increasing by 6,863 lots to 54,946 lots and aluminum net longs rising by 1,170 lots to 60,434 lots, bolsters the bullish case. The analysts remain bullish on copper, citing low inventories, ongoing supply challenges, and strong long-term demand drivers as key factors supporting the market's upward trajectory.
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