Goldman Sachs predicts a "supply storm" in copper
Copper prices declined last week and are now down 2.4% on the year.
Analysts at Goldman Sachs say that's just the start as stockpiles continue to mount and demand from China is slowing. They say copper is "entering the eye of the supply storm" with supply set to climb 15% in the coming quarters. Meanwhile, customs data shows that Chinese imports of refined copper shrank in July to the smallest in 17 months, while exports jumped five-fold from a year earlier.
What may cause an acceleration to the downside in copper is a rise in bearish bets among speculators. Bloomberg highlights how net positioning shifted to short last week.
In the bigger picture, copper is often seen as an economic barometer but given that the moves at the moment are being driven by supply, that's a dangerous assumption.
