After hovering at five-month lows, copper prices started climbing upward as June closed, reaching monthly highs on the last three trading days and coming within shouting distance of its 2017 high of $2.78 a pound on February 13. LME copper also was trending higher toward the close of June with the cash contract selling at $5,905 per ton, well above the month’s average price of $5,699.
Most analysts are predicting further increases for copper in the second half of the year. They cite supply disruptions due to ongoing labor disputes with miners in South America and Indonesia, typical upticks in seasonal demand during summer months, and general growth in the global economy, although China’s prospects worry some.
According to the International Copper Study Group, the world refined copper balance indicates a surplus of around 165,000 tonnes for 1Q17. This compares with a deficit of some (12,000) tonnes reported for the same period of 2016. Forecasts of continuing deficits drove up copper prices early in the year and their failure to materialize is to blame for market blues in much of the first half. A decline in Chinese demand is the main culprit. China currently represents 47% of the world’s refined copper usage.
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