- Write by:
-
Wednesday, November 10, 2021 - 12:31:43
-
381 Visit
-
Print
Mining News Pro - Trafigura Group, the world’s largest copper trader and one of the most vocal bulls, expects Chinese copper demand to be weaker for the next few months — potentially providing relief for the market after available exchange stocks fell to the lowest in decades.
Trafigura’s chief economist Saad Rahim made the comments on a call with investment bank Jefferies, according to an analyst note summarizing it.
“Saad expects power constraints and the housing market slowdown to lead to weaker Chinese demand for copper and other metals between now and Feb 2022, which is when Chinese New Year and the Beijing Winter Olympics will take place,” according to the note.
The comments come after Trafigura played a key role in draining copper inventories from the London Metal Exchange in recent months. As available LME stocks fell last month to the lowest since 1974, prices surged and the short-term spreads spiked to the largest backwardation on record, while the LME imposed emergency rules to calm the market.
The trading house has said it withdrew metal from the LME to deliver to end users in Asia and Europe.
Notwithstanding his caution on the short term, Rahim was more optimistic on the prospects for copper and other metals over the course of 2022 and beyond.
“He expects the Chinese property market to begin to recover in 2Q22 and he also expects warmer weather in the spring to lead to more power supply and more economic activity,” Jefferies analysts including Christopher LaFemina wrote in the note. “Saad believes the timing of supply growth in base metals will be an issue, and an inventory restock in China will be needed as inventories have fallen to very low levels for some metals.”
Trafigura, which recently overtook Glencore Plc as the world’s largest copper trader, has emerged as one of the market’s most prominent bulls. Kostas Bintas, Trafigura’s head of copper trading, earlier this year predicted copper would hit all-time highs of $15,000 a ton.
Copper prices have eased since last month, trading on Tuesday at $9,670 a ton. However, spreads remain extremely tight, with contracts for immediate delivery trading far above those for later delivery.
The market’s focus is on the third Wednesday of November next week — the day when monthly liquidity on the LME is concentrated. The spread between November and December contracts last week traded as high as $285 a ton, and on Tuesday traded at $220 a ton.
Short Link:
https://www.miningnews.ir/En/News/617030
Battery metal prices are on the floor, and massive expansions by Chinese miners have been instrumental in driving them ...
Commodities usually rally when central banks cut interest rates, bolstering the case for going long raw materials in the ...
Indonesian state-controlled miner Aneka Tambang (Antam) aims to launch the construction of two nickel processing ...
Cocoa extended its surge — gaining more than $700 per ton in a single day and surpassing $9,000 for the first time ever ...
Ivanhoe Electric (NYSE American: IE) (TSX: IE) terest in the Samapleu-Grata nickel-copper project in Côte d’Ivoire after ...
Aluminum prices touched an 11-week high on Monday over concerns over slow recovery in production in China’s Yunnan ...
China’s steel industry is young compared to Europe’s, and its transition to net zero may be slower as it takes a ...
Iron ore futures tumbled in Singapore, extending a stretch of volatile trading amid deepening anxiety over Chinese ...
Iron ore futures were mixed on Friday, but set for a weekly gain on mounting anticipation of a pick up in demand in top ...
No comments have been posted yet ...