Global copper short-term outlook September 2023

Copper has been struggling for direction through most of September amid signs of weakness in the physical market, concerns over Federal Reserve policy and a disappointing Chinese economic recovery. Three-month prices fell to their lowest level since May this year, after the Fed indicated that its policy would remain restrictive for longer. This pushed the dollar to a six-month high and, coupled with rising LME exchange inventories, dragged 3-month copper a low of US$8101/t. Although prices recovered from their lows and ended the month trading closer to the $8,300/t level, a sustained recovery in the price will need to be supported by follow through buying based on improved underlying fundamentals. This would seem unlikely given the upward trajectory in LME exchange inventories.