LIVE MARKETS-Citi bearish on copper, but not as bearish as before

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com.

CITI BEARISH ON COPPER, BUT NOT AS BEARISH AS BEFORE

Analysts at Citigroup have revised up their price forecasts for copper but still expect prices to fall in the near term as higher U.S. tariffs hold back manufacturing and growth.

"While we expect August U.S. tariff hikes to remain a drag on growth and global manufacturing activity through 2H’25, a softer dollar has provided some support for copper with prices resilient so far despite a pullback in investor positioning," writes Citi commodities research Tom Mulqueen.

Mulqueen also believe there will be a more gradual unwind of excess Section 232-related copper inventory than previously thought.

The White House ordered a Section 232 investigation into copper imports in February, using a law that gives the president authority to impose higher tariffs based on national security grounds.

That led to record shipments of copper to American ports, with copper imports to the U.S. increasing almost 130% year-on-year from January to May, according to ING.

"The persisting (albeit small) positive COMEX-LME arb and lack of deliveries to LME warehouses in the US so far this month suggests an unwind of the ~510kt of excess Section 232-related US copper inventory is likely to take place over months rather than weeks," Citi's Mulqueen says.

The U.S. bank sees copper prices falling to $9,200/t over the next three months, versus their previous expectation of a fall to $8,800/t. It was last at $9,777.

(Samuel Indyk)

*****

FOR EARLIER LIVE MARKETS POSTS

CENTRAL BANK STATUS QUO SET FOR JACKSON HOLE TEST CLICK HERE

STOXX INCHES UP BEFORE ALASKA SUMMIT CLICK HERE

EUROPE BEFORE THE BELL: EARLY BOUNCE, THEN WAIT FOR ALASKA CLICK HERE

MORNING BID WHO'S AFRAID OF A HOT PPI? CLICK HERE