Copper Fundamental Analysis – for the week of August 22, 2016 -Forecast

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Published: Aug 20, 2016, 07:19 UTC

Copper remains neutral this week with no big data so prices will move in response to the US dollar. Copper is trading at 2.169 down 7% on an annual basis.

Copper Fundamental Analysis – for the week of August 22, 2016 -Forecast

Copper remains neutral this week with no big data so prices will move in response to the US dollar. Copper is trading at 2.169 down 7% on an annual basis. Chinese data has remained worrisome as the government tries to reposition and reshape their economy. Copper is underperforming every other major base metal so far this year.

The London Metal Exchange three-month price is trading around $4,840 per tonne, translating to a year-to-date gain of just under five percent. And there are plenty of analysts expecting even lower copper prices over the coming months.

Investors are shunning copper, preferring hotter metallic markets such as zinc, currently showing a year-to-date gain of almost 47 percent.

Peruvian production of mined copper jumped by a staggering 51.5 percent to 1.12 million tonnes in the first half of this year. National output was 741,000 tonnes in the year-earlier period, according to Peru’s ministry of energy and mines. The core drivers of this surge are two new mines, Las Bambas and Constantia, and the expansion of another one, Cerro Verde.

The focus now, according to Hudbay, is on “optimization of plant performance” with the mine expected to produce 110,000-130,000 tonnes this year, which is actually above the anticipated life-of-mine average performance rate.

Cerro Verde, majority owned by Freeport McMoRan, is now reaping the benefits of a major upgrade that was completed late last year. The expansion will deliver an extra 600 million lb. annual capacity.

First-half production jumped to 260,000 tonnes from 98,700 tonnes in January-June 2015.

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Week of August 22-25, 2016

Date	Country	Name	Volatility	Previous
8/23/2016	GBP	Inflation Report	3
8/24/2016	EUR	GDP w.d.a (YoY)	3	1.8
8/24/2016	EUR	GBP s.a (QoQ)	3	0.4
8/24/2016	EUR	GDP n.s.a (YoY)	3	3.1