Commerzbank’s Barbara Lambrecht argues Copper faces near‑term pressure from rising exchange inventories and broader metals volatility, but maintains a constructive long‑term view. Chinese grid‑expansion capex is up sharply and industry forecasts point to slower supply growth and calls for higher state reserves, underpinning expectations of sustained demand support despite current headwinds.

Inventory pressure versus structural demand

"Base metal prices are not only facing headwinds from the precious metals markets, but the fundamentals have also been rather negative recently. This is particularly true for copper."

"But regardless of the current headwinds, we see two factors that provide sustained support: On the positive side, China's energy companies responsible for grid expansion, which are probably the largest consumers of copper, reported that they had increased their capital expenditure in January by 35% compared to the previous year."

"This indicates that grid expansion is indeed being pushed ahead significantly, as announced."

"Second, at its annual briefing, the China Nonferrous Metals Industry Association forecast production growth of only 5% in the current year, down from 10% in the previous year. It also called once again for the government to build up more copper reserves."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)