🔺 What to do when markets are at an all-time high? Find smart bargains, like these.See Undervalued Stocks

Copper prices vulnerable to downside: BCA

Published 29-10-2024, 07:08 pm
© Reuters.
HG
-

Investing.com -- Copper prices face downward pressure as slowing demand growth is outpaced by resilient supply, according to BCA Research in a note this week.

BCA warned that the metal's market fundamentals suggest copper prices are vulnerable over the next six months.

"Investors' purchases of copper have been supporting prices, even as demand growth has been slowing down and has fallen below the pace of supply growth," BCA stated.

The research firm expects this dynamic to shift further toward oversupply, creating downward pressure on prices.

Weaker Chinese demand is also cited as a key headwind. BCA highlighted that even if Beijing introduces meaningful stimulus measures to boost the Chinese economy, "it will probably take at least six months before the rally in copper prices commences in earnest."

Until then, sluggish demand from China will weigh on the market. The outlook for copper demand outside of China is said to be similarly bleak.

"Investors should not bet on an acceleration in ex-China copper consumption as the global manufacturing and industrial cycles are on the verge of renewed contraction," BCA warned.

In the short term, BCA sees few reasons for optimism. "It is premature to bet on a copper demand acceleration over the coming months," the report emphasized.

Instead, BCA suggests that the better opportunity to adopt a bullish stance on copper and related mining stocks will emerge "in the coming six-to-nine months" as market conditions potentially stabilize.

For now, the research firm cautions investors against expecting any near-term recovery in copper prices, pointing to the combination of oversupply and weak demand as persistent obstacles.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.