Copper went into 2018 carrying high expectations for a bullish year. That still might materialize, but coppers story so far has been one of rising stocks on all three major exchanges, weak premiums, a comfortable contango and a relative lack of supply disruptions.
There is very little sign of physical tightness, which is undermining the copper bulls narrative. As a result, speculative length has been reduced and prices are really only attempting to rally on the back of dollar weakness.
We would not be surprised to see prices still trying to work higher in March, especially if the dollar remains weak and perhaps with the support of a seasonal pick-up in demand, our average LME base case cash price forecast of $7,185 per tonne for Q1 seems to have slipped out of reach. We have revised it down to $7,090 per tonne now.
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