World copper prices are under pressure from the growth of supply

The price of copper was noticeably sagging at exchange trading on Monday, February 11. Three months of growth today have been replaced by a drop in price by 2% within one trading day on the London exchange of metals. Bidding closed at 8199 dollars per ton, against $ 8,346 at the opening. A tangible difference of almost $ 150 per ton is an indicator of redundancy of copper supply in world markets and a temporary drop in demand for it related to the beginning of the holidays in China.

Meanwhile, analysts are confident that today's collapse of copper prices is temporary. “Macro indicators and market trends are quite constructive, it would simply be strange if the demand for metals suddenly appeared today, it simply does not and will not be the resumption of the work of factories in China” says the Societe Generale analyst Robin Bhar.

According to experts of the Australian Bank Anz, a further increase in copper supply on the London metals exchange can develop into a serious obstacle to the increase in the price of this metal. "During Monday, the volume of supply on LME grew by 11 thousand tons and amounted to more than 4900 thousand tons, which is a record high in the last two years," the ANZ Bank market from the Bank of Bank says. “If copper reserves continue its growth, the market will respond to this with a fall in cash demand and bring down copper price,” analysts say.

However, according to the analysts of Macquarie Group limited, “China inventory data indicate a critically low level for full -fledged production, and this despite the fact that manufacturers have repeatedly declared intention to increase copper purchases. After the holidays, this may lead to a sharp decrease in copper residues in customs warehouses and a jump in prices for this metal.”

The actual reserves of copper in Shanghai over the past week fell by 15 thousand tons and amounted to 196 thousand 699 tons.