Base metals slide through the collector – TDS

TD Securities analysts note that our measure of commodity demand continues to weaken amid a risky global macro landscape.

The base metal complex turns downward

“Our cross-complex return analysis framework confirms that the demand side is finally starting to weigh on base metals as the early summer euphoria fades.”

“Inflows into broad commodity ETFs throughout May lifted the pool, but easing inflows and modest outflows are also beginning to impact the base metals pool. In this sense, the AUM of base metals ETFs has also declined significantly.

“For copper, our return analysis framework also shows a significant drag from differentiated factors, such as positioning, suggesting that the red metal may remain vulnerable to further downside in the near term as oversized positions are cut.”