Can copper prices hold recent gains?

The massive surplus that was building in the copper market has practically erased thanks to a strong rebound in Chinese industrial demand and mining issues on the supply side . It is estimated that Covid-19 related mined supply outages in the first half of the year amounted to almost 500Kt, equal to 2.3% of demand. Riding on the wave of a generous Chinese infrastructure stimulus and a weakening dollar, our view is the copper prices will be well supported until the end of the year. Nevertheless, it is now clear that the Chin ese economy is experiencing a large gap between industrial demand and aggregate demand , with the former still struggling. Combined with what seems to be turning into a difficult winter (Covd-19 wise) in the W estern world, we think that prices will retreat in the first quarter of 2021.