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Copper hits three-year high amid warnings of correction

Published 08/31/2017, 10:59 AM
Updated 08/31/2017, 10:59 AM
Copper hits three-year high amid warnings of correction
  • Copper prices jumped to the highest in nearly three years, pushing this month's gains to 7.5%, after a better than expected reading on Chinese manufacturing raised the outlook for continued strong demand.
  • The Chinese factory data was “just another bullish story to throw into the pool of bullish sentiment that we have for base metals," ING analyst Warren Patterson says while cautioning that prices are moving away from fundamentals as speculative investors pour into base metals.
  • “Fundamentals have been decent, but they’re now fully priced into the market and the extent of this rally means we have overextended," says Societe Generale (PA:SOGN) head of metals research Robin Bhar, predicting copper will fall by 10% by the end of the year.
  • Even some copper miners think the metal’s price has climbed too much too soon: “It’s true that all of the fundamentals are good in the medium and long-term. but I would be very cautious” about the copper rally, says Oscar Landerretche, chairman of the world’s largest copper miner, Codelco.
  • Major base metals producers are broadly higher in today's trade: FCX +1.2%, RIO +1.9%, BHP +1.3%, VALE +1.1%.
  • ETFs: JJC, CPER, CUPM
  • Now read: EIA Natural Gas Inventory

Original article

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