Copper fundamentals remain strong, and the outlook is bright

Copper (HG1:COM), (COPX), and (CPER) started this year with a 30% rise until 5/20, then fell 13%.

Analysts led by investment strategy analyst Mason Mendes and John LaForge, who is responsible for real asset strategy, wrote in a Wells Fargo Investment Institute notebook that “financial speculators were a little too optimistic at the beginning of the year and pushed prices above basic fundamentals.”

Copper prices of around $9,600 per ton and $4.42 per pound appear to be “almost adequate based on current fundamentals.”

According to the Commodity Futures Trading Commission, financial speculators turned “extremely bullish” against copper (HG1:COM), (COPX), and (CPER) early in the year.

China accounts for 56% of the world's total copper purchases.

Analysts at the Wells Fargo Investment Institute say copper (HG1:COM) is “neutral” among other industrial metals. The global manufacturing industry remains positive and is improving in 2022 and 2023.

“Also, long-term fundamentals appear to be strong, supported by positive trends in fields such as green energy, AI, and digital assets,” the analyst stated.