September Copper data showed a 57,000-ton deficit, but seasonally adjusted figures point to a slight surplus, suggesting the market remains well supplied despite recent price rallies, Commerzbank's Head of FX and Commodity Research Thu Lan Nguyen notes.

Caution advised ahead of confirmed supply deficit

"The International Copper Study Group (ICSG) reported a supply deficit of 57,000 tons for the month of September. However, on a seasonally adjusted basis, this translates to a supply surplus of 17,000 tons, which is almost unchanged from the previous month. For the first three quarters of the year, the total supply surplus amounted to 94,000 tons."

"This indicates that the Copper market remains well supplied overall. However, it is worth noting that last year, the surplus at this point was as high as 310,000 tons. Therefore, the supply situation has indeed deteriorated."

"The market seems to have already extrapolated this trend into the future, anticipating a shift to a supply deficit, which is why Copper prices have surged significantly in recent months. Until the ICSG's data explicitly confirms such a shift, we would advise caution in expecting another sharp price increase — at least in the short term."