Mining

Copper price set for the biggest weekly decline since November

The most-traded February copper contract on the Shanghai Futures Exchange was down 0.5% at 69,560 yuan ($10,910.69) a tonne.

Click here for an interactive chart of copper prices.

“Market sentiment improved a little bit after participants digested the hawkish US Federal Reserve’s minutes of December policy meeting,” a Singapore-based trader said.

“Concerns over tight supply, already affected by covid-19-related controls, were exacerbated by the unrest in Kazakhstan,”, he added.

The Fed, at its December meeting, began plans to start cutting the amount of bonds it is holding, with members saying that a reduction in the balance sheet likely will start sometime after the central bank begins raising interest rates.

Goldman Sachs Group said it is “extremely bullish” on commodities, amid a supercycle that has the potential to last for a decade, according to Jeff Currie, the bank’s global head of commodities research.

“The new year has started against a backdrop that includes record dislocations in energy, metals and agriculture, and significant amounts of money in the system,” Currie said in a Bloomberg Television interview.

“In addition, investment positions in commodities are low,”

“The best place to be right now, particularly given the Fed pivot, are commodities,” Currie said.

“We think you’re going to see another year of out-performance of commodities and real assets more broadly.”

On-warrant copper stocks in LME-registered warehouses were last at 80,525 tonnes, up from a historic low of 14,150 tonnes in October but far below peaks seen in August.

(With files from Reuters and Bloomberg)

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