Copper prices have been experiencing some volatility following the US election, but they have ultimately remained range-bound with a slight downside bias. China’s recent stimulus package did not meet expectations, which has raised concerns about copper demand and China’s economic recovery. Additionally, with a Trump presidency, there are questions about future US infrastructure spending and its impact on copper demand, especially in the renewable energy sector.
The Copper Monthly Metals Index (MMI) has retraced to the downside, showing a 3.56% decline from October to November. After outperforming the base metal category last month, Comex (CME) copper prices peaked on October 3 and then experienced a modest retracement, resulting in a 5.21% decrease from the end of September.
Despite the significant volatility in the copper market post-election, it remains uncertain whether more market volatility is on the way. The price of copper’s reaction to the US election was bumpy but sideways, with prices showing swings but failing to break out of their short-term range. The bias seemed to be towards the downside, with prices closing at $XXX/mt on November 12.
2024 has been a volatile year for copper prices, with a frenzied uptrend in the first quarter followed by a sharp retracement. With prices stabilizing midway through Q4 as the market adjusts to a new US president, a Trump presidency could offer bullish headwinds for the copper market. However, there are concerns about the impact on subsidies for copper-hungry sectors like EVs, electric appliances, wind towers, and solar.
China’s latest stimulus package did not provide relief to copper bulls, disappointing markets. The $1.4 trillion plan focused on relieving debt burdens on local governments rather than offering direct stimulus. The lack of a comprehensive package from China has raised concerns about the nation’s declining population and weak consumer spending, impacting the outlook for copper demand.
Investment funds have shown little bullish conviction between the US election and Chinese stimulus, with data from the LME indicating a shift towards selling off long bets and picking up short bets. This trend has given copper prices a slight downside bias in the short term, with funds approaching the market cautiously.
In conclusion, the copper market is facing uncertainty due to various factors, including political changes, stimulus packages, and investment trends. While there are some supportive drivers on the horizon, caution is advised as the market navigates through these challenges. Stay updated with the latest developments in the copper market to make informed decisions about investments and trading strategies.
