Citi has released a report expressing a constructive outlook on the copper market over the coming weeks, citing signs of physical supply tightening emerging in the Chinese spot market. The firm maintains its 0-3 month short-term copper price target at $14,500 per ton, and its year-end target at $15,000 per ton.

The report notes that over the past month, copper prices have remained resilient despite a pullback in speculative long positions and a broader weakening in commodities. While demand growth remains tepid, the supply side is facing greater pressure. Visible inventories outside the United States, particularly in China, are declining, coupled with rising Chinese import demand, all of which are indications of potential physical supply constraints.

Global mine supply continues to be under pressure, and the response of scrap supply to higher prices has been weak so far this year. Mine supply risks in Chile and restrictions on sulfur supply could further boost market sentiment at the margin.