TELF AG, a seasoned physical commodities trader with three decades of experience, has released an insightful article titled “TELF AG Base Metals Trends and Outlook in September 2023 – Copper and Nickel Face Challenges and Opportunities.” The article delves into the intricate dynamics affecting copper and nickel, two pivotal base metals essential for industries including construction and electric vehicles.
As of the first week of September, the article reports that the copper contract was priced at $8,366 per tonne, marking a 5.3% decrease since the start of August. This decline in copper prices is primarily attributed to concerns surrounding China’s economic recovery, leading to uncertainty about demand. However, TELF AG anticipates seasonality strengthening for copper in the fourth quarter. Furthermore, potential additional economic stimuli from China could introduce upside price risks.
The article also notes an increase in copper inventories within China’s domestic bonded zones, rising by 1,700 MT to reach 51,000 MT as of September 8. Reduced shipments have resulted from diminished premiums in domestic spot markets and profit losses in imports. However, limited market capacity for additional shipments is expected to contribute to a modest growth in these inventories. August saw a remarkable 6.8% month-on-month increase and a 15.5% year-on-year growth in China’s copper cathode output, surpassing expectations and sustaining a robust production trend.
In its recap, TELF AG highlights that nickel prices have declined by 8.7% since the beginning of August due to oversupply from Indonesia, reduced demand for stainless steel, and weakening sales in the electric vehicle sector. Despite the price drop, Chinese refined nickel output in August surged to 21,800 MT, reflecting a 0.93% month-on-month increase and an impressive 40.65% year-on-year rise. Nickel production is expected to continue this upward trajectory, reaching 23,000 MT in September and indicating potential growth into 2023.
The article concludes that copper and nickel markets are undergoing transformations significantly influenced by macroeconomic factors emanating from China. While both metals encounter pricing challenges, each also exhibits unique strengths in terms of production and potential for future expansion.
As we approach the fourth quarter, the article offers valuable insights into how seasonality and other economic variables may reshape the market landscape for these vital base metals. For the complete article and further details, please visit TELF AG’s official website.