Copper fell for the fifth consecutive session, the longest decline in three months, as imports into China fall 16 percent from May to April. The declining imports has brought on worry about current levels of demand. However, this is likely to take place due to China’s probe into its bonded copper warehouses to count inventories and prevent commodity financing. Copper had been lent out as financing collateral, oppose to being implemented into industry and caused illusory demand.
Friday’s copper analysis called for copper futures to test $3.05, and price action pushed through before slightly pulling back. The trend still remains to the downside as speculators continue to be net-short, the only net-short industrial metal on the London Metal Exchange (LME). Net-long copper positions fell 24 percent to a monthly-low.
Phil Streible, a senior commodities broker at RJ O’Brien & Associates, said “there’s going to be continued oversupply.” The steep decline in imports is indicating demand for the volatile metal is waning. The probe into copper warehouses will also determine whether inventories were counted more than once.