Categories: Base Metals / General Market Commentary
Topics: General Base Metals / General Market Commentary

Copper to be best performing commodity of 2017 - analysts

Copper to be best performing commodity of 2017 — analysts

Copper, until recently one of the worst performing commodities of the past two years, experienced a sudden spike at the end of 2016, posing several questions as to the direction of the market as we move into 2017.

The rally, which began on the heels of Donald Trump winning in the US presidential election, has been partly based on speculation regarding the impact of the President-elect’s $500 billion infrastructure plans on demand for the metal.

It has also been fuelled by a pick-up in Chinese imports, responsible for almost 50% of global copper demand, which is seen a good omen for the industry’s health.

Even Goldman Sachs — usually the most pessimistic when it comes to forecasting what’s in stake for copper in the short term — has changed its tone to a more positive one.

The investment bank now believes that increased demand from China will leave the market tighter than previously expected, which will support a more "bullish" environment for the metal at least to mid-2017.

"Although it is tempting to blame this on speculative positioning, the materially stronger fundamental developments that contributed to this surge in speculative interest are likely to underpin a more bullish environment for copper," Goldman analysts wrote in early December.

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