Copper Prices Face Downward Pressure

Copper prices are currently under downward pressure due to slowing demand growth being outpaced by resilient supply, as highlighted by BCA Research.

BCA warns that the fundamental market conditions suggest that copper prices may be vulnerable over the next six months. While investors' purchases have been supporting prices, the slower demand growth has now fallen behind supply growth.

The research firm anticipates that this dynamic will likely shift toward oversupply, leading to further downward pressure on prices. A notable factor contributing to this situation is weaker demand from China. BCA emphasizes that even with potential stimulus measures from Beijing to bolster the economy, an increase in copper prices will probably take at least six months to materialize.

In the interim, sluggish demand from China is expected to continue impacting the market negatively. Moreover, the outlook for copper demand outside of China looks similarly grim, with BCA cautioning against expecting a quick acceleration in demand as global manufacturing faces renewed contraction.

In the short term, BCA sees limited reasons for optimism regarding copper prices. Their report signals that it is premature to anticipate a demand acceleration in the coming months. However, they suggest that better opportunities for adopting a bullish stance on copper and mining stocks may arise in the next six to nine months if market conditions stabilize.

For now, BCA advises investors to refrain from expecting any immediate recovery in copper prices due to ongoing oversupply and weak demand.