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Copper Fundamental Forecast – August 29, 2016

By:
Barry Norman
Published: Aug 26, 2016, 11:51 UTC

Copper gained 9 points to 2.086 after steady declines this week. The price of copper tumbled to an eight-week low amid concerns about rising inventories,

Copper Fundamental Forecast – August 29, 2016

Copper gained 9 points to 2.086 after steady declines this week. The price of copper tumbled to an eight-week low amid concerns about rising inventories, two of Canada’s leading banks appear to be ruling out any quick rebound in the price of the red metal.

Scotiabank is forecasting that the price of copper will average US$2.20 a pound this year, down from the 2015 average of US$2.50 a pound. It expects to see an average price of US$2.20 in 2017.

RBC Capital Markets, an arm of the Royal Bank of Canada, takes a similar view by estimating that the price of copper will average $2.25 a pound next year, a slight increase from RBC’s 2016 forecast of $2.10 a pound.

Two weeks ago, the research institute CRU said hardly any copper is being bought on the spot market at present. Rather, it said imports of copper concentrate have soared by 43 percent year-on-year to 1.38 million tons.

CRU attributed the increase to high treatment and refining charges, which make the production of refined copper attractive for copper smelters.

Still, metal mining giant BHP Billiton said last week it is cautiously optimistic about the outlook for copper.

It said its optimism is based on the view that declining ore grades at producing mines will lead to supply deficits in the future. BHP foresees solid copper demand in China and substantial demand growth in other emerging economies.

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Upcoming Economic Events that you should be monitoring:

August 29, 2016

Country Event Volatility Previous
USD Personal Consumption Expenditures 2 0.9
USD Core Personal Consumption 2 0.1
USD Personal Income 2 0.2
USD Personal Consumption Expenditures – 2 0.1
USD Personal Spending 2 0.4
USD Core Personal Consumption 2 1.6
USD Dallas Fed Manufacturing Business 2 -1.3

Government Bond Auctions

Date Time Country Auction

Aug 25 18:00 US Holds 7yr note auction

Aug 26 10:10 Italy Holds zero coupon

 

 

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