Copper prices have climbed amid signs of easing geopolitical tensions as US-Iran negotiations show progress, reducing concerns over transit disruptions and inflationary pressures. ING commodities strategists Warren Patterson and Ewa Manthey highlight that dwindling inventories at both the Shanghai Futures Exchange and London Metal Exchange are providing fundamental support to the metal’s valuation. Despite tight global stocks, Chinese refined copper production increased in May, driven by improved margins for smelters in the region.
The combination of shrinking exchange inventories and geopolitical developments suggests supply constraints remain a key factor influencing copper markets in the near term. Traders should monitor how Chinese output trends balance against declining warehouse stocks, as this dynamic will likely determine price trajectory. The improved smelter economics in China could partially offset inventory pressures if production continues expanding.
FXnCO Insight
Position for continued copper price support while watching Chinese production data closely, as sustained output growth could moderate the bullish impact of tightening global inventories.
Source: FXStreet