Salient to Investors:
Copper traders are the most bullish in a year versus the most bearish in four months a week ago.
Hedge fund bets on a rally are near the highest in 14 months.
Christin Tuxen at Danske Bank said the market has been way too pessimistic on China – China is will stabilize and avoid a hard landing which is happening. Tuxen sees commodities, and metals in particular, getting support in coming months.
Construction generates 40 percent of copper demand, 439 pounds are needed for a typical family home.
Cengiz Y. Belentepe at Barclays says China will be a voracious buyer of industrial metals even if growth slows, and expects demand to beat supply by 41,000 tons next year, the fourth consecutive annual shortage.
Ray Key at Deutsche Bank said the new Chinese government may change policies on infrastructure spending which would raise questions about industrial-metals demand.
Goldman Sachs lowered its 12-month price estimate to $8,000 on weakening demand in Europe, Brazil and India, combined with growth in mine supply – but still expects $9,000 in six months.