Expect copper correction
Could the copper market have over-reached itself? One market source tells us to expect a sharp retraction.
Copper is due a sharp retraction it could "go back to $4,000-$5,000", says an anonymous market source, quoted in the FT. It reached a record $8,000 a tonne this week, up 75% since the start of the year, but many think the market has over-reached itself. Traders say the latest surge was driven by several large investors closing their short positions. These are thought to include China's State Reserve Bureau, buying to cover a reported 200,000 tonnes worth of short bets made by one of its traders last year, and US hedge fund Ospraie Management.
Copper's fundamentals are positive, but trading volumes have been declining and the exit of forced buyers could dampen the market. Any weakness in copper could spread to other metal markets. "When copper falls, so will aluminium, and that is true of zinc, nickel, or whatever," says independent analyst Cliff Green on Reuters.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.
-
Review: Eden Roc Cap Cana – fun, sun and golf in the Caribbean
Travel Eden Roc Cap Cana in the Dominican Republic offers everything from relaxing by the pool to a world-class golf course
-
Reeves delays cash ISA reform, but savers are not out of the woods yet
The chancellor has reportedly delayed plans to cut the cash ISA limit, which were set to be announced at Mansion House on 15 July, and will take more time to consult with the industry