Copper price largely escaped general downward pull on commodity markets

At the beginning of the week, the copper price (based on the 3-month contract on the LME) largely escaped the general downward pull on the commodity markets. It received tailwind from several sides. On the one hand, it was supported on the supply side by the news that the Chilean government had ordered the closure of a copper mine belonging to a Canadian mining company due to a sinkhole. The mine is part of a complex that was supposed to produce 155 to 165 thousand tonnes of copper this year.

On the other hand, there was support from China, where inventories rose less than last year during the past holiday week, according to data from the SMM Research Institute, which is interpreted as an indication of robust demand. However, experts remain sceptical about a substantial demand recovery in China. In addition to the zero-covid strategy, which experts believe the government is likely to stick to even after the party congress on 16 October, the weakening property market argues against a revival in demand. While smaller measures on the part of Beijing to support the sector are conceivable, overall China's leadership seems determined to reduce the economy's overdependence on the real estate market.

Source: Commerzbank Research, Photo: Fotolia