Copper expected to consolidate around $5,50 /mt – UOB

In opinion of Strategists at UOB Group’s Quarterly Global Outlook, prices of Copper are seen stabilizing around the $5,50 area per metric tonne in the next quarter.

Key Quotes

“Copper remains the undisputed proxy for global economic health. Strictly from a long term macroeconomic outlook basis, copper should trade at a much lower “recessionary” price level. Previously, back in April, the IMF forecasted a -3% global growth contraction for 2020. In early June, the World Bank refreshed its global outlook and now calls for an even sharper -5.2% global growth contraction. However, LME Copper bounced back up sharply instead across April and May, above USD 5,000 / MT to USD 5,700 / MT. What caused this snapback and is this sustainable given the dire global economic outlook?.”

“As such, after such a strong near term rally, some consolidation may be in order. We therefore forecast neutral LME Copper at USD 5,500 / MT for the coming four quarters.”