September Copper Falls to 2 Month Lows
Inventories tracked by exchanges in Shanghai, London and New York climbed 5 straight days last week to the highest since May. Barclays said in a report that a recent slump in the Copper market “may be an early warning sign of weakening in China’s economic momentum.”
Futures have fallen for 4 of the past 5 weeks on the COMEX.
“Copper prices are super weak and look to continue to weaken,” a senior market strategist in Chicago, said in a interview. “Prices are going to erode lower and probably see shorts add to their positions here.”
Copper futures for September delivery fell 0.5% to $2.07 lb the COMEX in New York at the close the lowest since June 24 and down 8% since the July high.
The metal slid as much as 0.6% on the Shanghai Futures Exchange before closing little changed at 36,420 RMB Yuan ($5,455) tonne. It dropped 2.6% last week, the most since 13 May.
Hedge funds and other large speculators held a net-short position of 4,991 US Copper futures and options contracts in the week ended 23 August, according to Commodity Futures Trading Commission (CFTC) data released 3 days later. They switched from a net-long position of 2,237 a week earlier.
Copper has wiped out all of its gains this year, lagging behind other metals, as supply continues to outstrip demand.
Holdings in warehouses tracked by the London Metal Exchange (LME) climbed every day last week to the most since Y 2015 Friday, with stockpiles in Asia surging to the most since Y 2013.
The metal is likely being exported from China to the LME’s Asian warehouses to take advantage of more favorable premiums, Barclays said in its report, dated 28 August.
Chinese growth is forecast to slow to 6.5% this year, the weakest since Y 1990. Copper will be in “substantial surplus” for at least the next 2 years as a “huge wave of new mine supply hits the market,” according to Barclays.
London markets were closed Monday for a Holiday.
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