Copper price forecast

If an increase in copper in warehouses is an indicator, then copper prices may be under pressure. Copper on the London Metal Exchange (LME) is currently up 18% over the past week, the highest level since February, according to a report from the Financial Times.

Prices have recently hit a two-month high of nearly $ 5,000 a tonne, partly on expectations of further stimulus from central banks. “The market is struggling to absorb all of the supply, in part because the supply is good, but the demand is not that great,” said Matthew Wonnacott, an analyst at the CRU consultancy.

How about copper demand in China, the world's largest consumer? Chinese copper exports jumped as much as 256% in May this year over the previous year. This raises some concerns about the balance of domestic demand and production, which increased by 7% compared to the same period a year ago.

Along with the LME, China's free trade zone copper inventories have also increased this year. Higher inventory levels are likely to limit the upside potential for copper prices. Despite copper rallying in June, the outlook for price action remains neutral for the coming months and all of this uncertainty.