After many months of gaining industrial metals we are starting to see some falls. This is due to the rising COVID-19 cases which is starting to show signs of an increasing momentum in cases. Copper, Zinc, and Aluminium have been some of the worst performing commodities during recent trading and unless demand can come from China there is room for declines.
The Bloomberg Industrial Metals Subindex have been rising for five straight months, climbing 22% from June to August. The growth in the metals markets was due to the re-opening of economies over that period. Copper rose 25% between June and August, whereas Zinc jumped 24%.
However, as the pandemic is gripping again in the Northern hemisphere the Bloomberg Industrial Metals subindex is down 3.6% and heading for its first loss since March. It is up to China to try and keep the demand levels alive and prevent further falls.
In this environment, copper futures look vulnerable to find more sellers: