Via Bloomberg,
It was March 01 where I highlighted the divergence between the price of Copper and Chinese manufacturing PMI's. With the Chinese economy using around 50% of the globe's usage of Copper and the price rising , as it was then, there was a mismatch in pricing. You can read the article here.
That divergence has caught up as Copper prices have fallen. With the US-China trade war very fragile at the moment, with waves of reassurance and then aggression repeatedly lapping on the shores of the conflict, it is worth being aware that Copper may have further to fall. I was reading a Bloomberg article yesterday and they mentioned that stockpiles jumped nearly 38% this year according to estimates. So, there is plenty of supply. On the upside the global market is forecast to see a copper deficit this year and stricter Chinese import curbs on scrap copper due July 1 will help increase Copper demand. The Chinese Government reduced shipments of lower-grade metal waste to reduce environmental pollution. See chart below -
Copper spot prices underperforms futures on the LME
The Shanghai Changjiang spot price fell to a recent multi month low. China's copper import premium over LME prices holds near a two year low which shows the weak demand from the world's biggest buyer of Copper. Copper could be a good trade for the worsening, or the improvement of the US-China trade conflict. See the chart below:
