SHANGHAI, Jul. 2 (SMM) - Copper has been on a roller coaster ride so far this year, ranging between 34,800-39,100 yuan per tonne in the first half of the year.

This is largely because of macroeconomic front and weak fundamentals, says SMM. Chinese enterprises had sufficient currency recently, but would rather leave the money in their current account than invest in real economy. For better returns, they then invested the money in the property market, driving up commodity market.

Base metals rebounded in the first half of the year. Copper, however, reported merely small gains. Investors expecting further increases in copper prices thus rushed to the copper market. Meanwhile, yuan’s sharp devaluation also supported domestic copper price.

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But global copper inventories remain high. Copper stocks on LME, COMEX, SHFE and China’s bonded zone totaled 1 million tonnes in late June, compared with 875,000 tonnes early this year. China’s copper output grew 7.5% year-on-year to 3.81 million tonnes during January-June, according to SMM data.

What’s more, complicated macroeconomic environment worldwide, including a possible Fed rate hike, UK’s vote to leave the EU and supply-side reform in China, raised market uncertainty. So investors prefer short-term speculative operation, and this raised volatility in copper price.

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