Copper Prices on Track for Monthly Gain Amid Supply Deficit Concerns
Copper prices have been steady on Friday and are set to rise by 3% in July, thanks to increased risk appetite in equity markets and concerns about a lack of visible stocks outside the US. The London Metal Exchange's benchmark three-month copper price has reached $13,798 per metric ton, its highest level since July 22.
According to ING commodities strategist Ewa Manthey, 'Copper enters August with supportive fundamentals.' She notes that the market is still facing a supply deficit and limited inventory buffers outside the US, leaving prices vulnerable to further disruptions or signs of stronger demand. The available copper stocks in LME-registered warehouses have fallen by 50% in July, reaching their lowest level since mid-January.
The premium of the cash LME copper contract over the three-month forward has reached $40 per ton, its seven-month high. This indicates some tightness for nearby supply. Additionally, China's yuan has risen to its highest level against the dollar in more than three years, making dollar-priced metals more attractive for Chinese buyers.