TELF AG, a seasoned physical commodities trader with 30 years of industry 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 provides an in-depth examination of the intricate market dynamics influencing copper and nickel, two fundamental base metals crucial for various sectors, including construction and electric vehicles.
As of the first week of September, TELF AG reports that the copper contract was valued at $8,366 per tonne, marking a 5.3% decline since the start of August. This dip in copper prices primarily stems from concerns regarding China’s economic recovery, which has introduced uncertainties surrounding demand. Nonetheless, copper is anticipated to benefit from seasonality in the fourth quarter, and potential economic stimulus measures from China could introduce upward price risks.
The article also highlights an increase in copper inventories within China’s domestic bonded zones, rising by 1,700 metric tons to a total of 51,000 metric tons as of September 8. Reduced premiums in domestic spot markets and diminished import profits have contributed to decreased shipments. However, limited market capacity for additional shipments is expected to result in a modest growth in these inventories. Notably, China’s copper cathode production experienced a substantial 6.8% month-on-month increase in August, along with a noteworthy 15.5% year-on-year growth, surpassing expectations and sustaining a robust production trend.
According to TELF AG’s findings, nickel prices have seen an 8.7% decline since the beginning of August, influenced by factors such as oversupply from Indonesia, decreased demand for stainless steel, and weakening sales in the electric vehicle sector. Despite this price decrease, Chinese refined nickel output surged to 21,800 metric tons in August, reflecting a 0.93% month-on-month and an impressive 40.65% year-on-year rise. Nickel production is projected to reach 23,000 metric tons in September, indicating a continuation of this upward production trend into 2023.
The article concludes that copper and nickel markets are currently navigating shifts, largely influenced by macroeconomic factors emanating from China. While these metals face pricing challenges, they also exhibit distinct strengths in terms of production capacity and potential for future growth.
As stakeholders approach the fourth quarter, the article offers valuable insights into how seasonality and other economic factors may alter the market landscape for these essential base metals. To access the complete article and obtain further information, please visit TELF AG’s official website.