China's release of national copper reserves not a game-changer for price rally - analysts

(Kitco News) - Copper prices have been taking a hit, falling to a two-month low after China announced that it would sell its strategic reserves of the base metal to cool down what has been a hot market.

However, some commodity analysts expect that lower prices will prove to be a new buying opportunity as China's move does nothing to change the supply and demand fundamentals. Many analysts see the copper market in a supply deficit for at least the next three years as it will take time to bring new supply into the market.

"Short-term, this is a way to dampen prices and push speculators out of the market, but long-term investors will see this as a buying opportunity," said Phillip Streible, chief market strategist at Blue Line Futures. "We still see strong demand for copper, and we think it still remains a great inflation hedge."