Copper trades strong for the time being – TDS

The
industrial
metals
complex
remains
in
the
crosshairs
for
Commodity
Trading
Advisors
(CTAs),
TDS
senior
commodity
strategist
Ryan
McKay
notes.

Base
metals
remain
on
demand

“With
the
upcoming
plenum
in
China
gaining
plenty
of
market
focus,
base
metals
have
held
strong
as
stimulus
optimism
gets
baked
in.
However,
our
gauge
of
global
commodity
demand
continues
to
weaken,
while
depressed
premiums
and
surging
inventories
in
the
Middle
Kingdom
argue
against
fundamental
tightness
in Copper.”

“With
still
bloated
money
manager
positioning
on
Comex
and
LME,
the
lack
of
evidence
supporting
current
physical
tightness,
or
a
disappointment
on
potential
Chinese
stimulus,
can
continue
to
see
these
positions
unwind.
Indeed,
speculators
on
the
Shanghai
Futures
Exchange
(SHFE)
hold
only
modest
positions
across
the
base
metals
complex.”

“In
this
sense,
as
upside
momentum
fails
to
manifest,
CTAs
have
turned
into
sellers
of
the
Red
Metal.
However,
funds
could
halt
their
selling
if
prices
move
back
above
$9,760/t,
while
further
downside
toward
$9,142/t
would
be
needed
to
fuel
additional
liquidations.”