Price action in the base metals complex is preventing Commodity Trading Advisor (CTA) selling pressure on copper, however a rising sell trigger, now at $9,350 per tonne, poses an increasing risk to the red metal, according to commodity strategists at TDS.
Demand for base metals in China is declining
“Indeed, with our gauge of global commodity demand still weak, while low premiums and rising stockpiles in the Middle Kingdom point to a lack of fundamental tightening, there are plenty of potential catalysts that could send prices lower from here, especially given the bloated positions of money managers.”
“While the fundamental position certainly looks promising in the coming years, the lack of evidence to support the current material distress could continue to see these money managers’ positions unravel.”
“Elsewhere, collective purchase agreements are modest buyers of aluminium and zinc but prices are close to levels that would see buying halted or reversed quickly as current momentum signals are on the weaker side.”

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