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ING strategists Warren Patterson and Ewa Manthey reported a decline in copper prices as LME inventories surged to a 16-month high, signaling oversupply relative to demand. The London Metal Exchange (LME) copper stockpiles have reached 230,000 metric tons, the highest level since early 2023, driven by weak industrial demand and increased production from top producers like Chile and Peru. This imbalance has triggered profit-taking by traders, pushing prices below key technical support levels. The bearish trend poses risks for commodity markets, particularly for investors holding copper futures or ETFs. Weak demand from China, which accounts for 50% of global copper consumption, exacerbates concerns about a prolonged oversupply cycle. Traders should monitor LME inventory data and Chinese manufacturing PMI reports for further clues on demand-supply dynamics. For Gulf investors, the decline in copper prices may impact construction and infrastructure sectors reliant on copper imports. Key watchpoints include China's stimulus measures, mining production disruptions, and potential central bank rate cuts affecting industrial metal demand. The primary asset to track remains Copper, with secondary focus on Gold as a safe-haven alternative.
