Posts Tagged ‘copper prices’

With Chinese Growth Seen Slowing, Copper Futures Near Five-Year Low

Copper futures is realizing the repercussions of the world’s largest industrial metal consumer’s industrial production slowing down. China’s industrial growth has seen its smallest gain in almost 15 years and copper futures is reflecting revelation currently down 900 points in New York’s Commodity Exchange.

Chinese government data reports last year’s metal-consumer’s earnings may have increased, albeit a meager 3.3%, but last month profit slid by 8% – the third straight month of declines. To make matters worst for copper futures, here in the US durable goods orders also fell for the fourth consecutive month and the US is the second biggest user of copper.

The trend for copper futures is nothing but down with new lows made just yesterday. We had a couple of copper futures trades earlier this month, but I need volatility to contract some before getting short this market once again.

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With Dollar Gain, Sets-up Copper Futures Fall

Copper futures have retreated yet again today and are poised for their biggest drop in eight weeks as the strengthening US greenback may be waning the appeal of metals as an alternative investment. Copper futures are down $3.95 per pound as of this writing.

A highly recognized Industrial Metals Index has fallen three out of the last four business days after four consecutive monthly gains through last month on signs of improving domestic manufacturing demand. A spot dollar index, however, has reached a five-month high with domestic service industries expanding in July at reportedly their fastest pace since December 2005.

With global markets nervous it might keep copper (futures) prices lower,” stated Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, sharing his insight regarding the current copper futures situation.

Copper futures trend is technically still up, but with clear signs of possibly “topping” at these levels. Two consecutive lows below the $317.20 level could change the trend to down – at a crossroads.

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Copper Futures Extend Losses on Chinese Real-Estate & Yuan

Copper futures are seeing a second day lower on the outlook of the weakness of both China’s real-estate market and their currency – the yuan.  Expert opinions claim delays in loans for real-estate transactions will slow demand for the industrial metal in the country that is the world’s biggest consumer of copper.

The delay in loans in China are expected to last until the end of March.  The Copper Development Association claims construction generates nearly 40% demand for copper world-wide.  Copper futures are down 4.1% year to date.

Kevin Riordan, director of research at Capital Trading Group in Chicago, had this to say regarding the current copper futures situation,Adding to slowing copper demand in China is the falling Yuan coupled with China’s weak real estate market.”

Copper futures trend is technically down, and we are short this market, but in the overall bigger view it has been trading sideways since last summer.  I’ll stick with the technical trend for copper futures until another picture unfolds.

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Speculation on Fed’s Next Move Weighs on Copper Futures

Copper futures are lower for a second day on the outlook our domestic economy is strengthening to the point the Federal Reserve bank may consider tapering the ongoing stimulus.  The United States is the second biggest consumer of copper in the world.

Service industries account for the biggest part of our nations economy, and this reportedly expanded last month.  Data yesterday reports US manufacturing increased by the fastest pace in two years in November.

When we consider the notion that QE is supportive to Copper prices, and the concept of any future tapering would be harmful to prices, we find ourselves in a situation where good manufacturing numbers are now bad news for the market,” says Kevin Riordan, director of research at Capital Trading Group in Chicago, regarding the current copper futures situation. 

We are short copper futures with the overall prevailing trend.  Copper futures is testing the mid-November low at this time.

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Home Sales & Rising Demand Help Copper Futures

After three down days, copper futures have paused here on signs of increasing demand from home sales rebounding last month.  Copper futures are up slightly at $3.2720 per pound as of this writing.

China is the world’s biggest consumer of copper and their current usage of the industrial metal has climbed to levels not seen since late 2011.  The US is the next biggest consumer and domestic sales increased almost 8% according to gov’t figures – topping analysts estimates.
           
Mason Ching, Automated Trading Manager, Global Futures Exchange & Trading Company in Encino, CA, had this to say regarding the current copper futures situation,In my opinion, copper futures fell on global economic concerns after the weaker-than-expected U.S. September consumer confidence and German September IFO business climate reports.”

The trend for copper futures remains down despite it trading between a broad range between $3.20 – $3.40 per pound.  I need some kind of bounce in copper futures prices before initiating another short position.

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China, Fed Stimulus Aids to Boost Copper Futures

Copper futures are up for a second-day as the industrial metal works its way higher from the June lows with higher highs, and higher lows.  Its the biggest two day rally for copper prices in almost three months once it was known the Federal Reserve will maintain bond purchases, and China’s manufacturing sector is expanding.

China’s “purchasing managers index” (a measure of contraction & growth) is said to have beat the estimate by one-half percent, and the Fed stating it will maintain its stance of promoting domestic growth by buying debt, are both reportedly contributors for copper futures rallying.  Whether it is short covering of bearish positions, or fresh buying on a demand outlook, copper prices are rebounding from being down 15 this year.
           
Barb Levy, chief director for Futures & Options Xecution’s futures division in Chicago, had this to say regarding the current copper futures situation, Copper futures rose in today’s trading in reaction to the higher than expected Purchasing Managers Index out of China overnight.”  Levy adds, “A strengthening economy in China would support copper (prices) as they are the world largest consumer of the metal.”

Copper futures head-and-shoulders formation, and a series of higher highs and higher lows, have helped the industrial metal out of its downtrend in my work – but barely.  I still will prefer to see how copper price-structure will unfold before committing to a direction.

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Manufacturing Gains in Part Boosts Copper Futures

Copper futures are grinding their way higher this month and once again today copper is back up for the first time since last week.  It appears the US manufacturing sector is gaining and talk about China’s government taking steps to improve their economy are likely factors boosting copper futures.

A federal reserve report revealed today output in our nation’s factories, mines and utilities spiked three-tenths of one-percent which is the biggest increase since earlier this year.  A respected news service is also reporting the world’s biggest consumer of industrial metals (China) will have their government’s officials laying out plans for economic growth for the remainder of the year.
           
“If Ben Bernanke continues to print money, in my opinion, that could make the markets rally.  Copper (futures) prices are higher by 450 points in the September contract at 3.19 a pound also at three-week highs with all three of the precious metals have outstanding chart structure as well,” says Mason Ching, Automated Trading Manager, Global Futures Exchange & Trading Company in Encino, CA, regarding the current copper futures situation.

The trend for copper futures remains technically down, but signs of a possible bottom and a change in trend are in the works.  More copper futures price structuring needs to happen to officially change the trend to up, and I will not be looking for any more “short” signals any time soon.

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Reduced Supply Boosts Copper Futures

After recent deadly accidents, the world’s second-largest copper mine remains closed while authorities continue to investigate.  Copper futures have been boosted to their highest price in a week on the prospects of reduced supply regarding this manner.

This copper mine is located in Indonesia and is expected to be closed as long as three months.  If shut-down for this long a period, it is expected to remove approximately 140,000 metric tons of the copper supply.    

Kevin Craney, a senior commodities broker at RJO Futures in Chicago, had this to say regarding the current copper futures situation, “Supply concerns continue to support the copper market; however, fundamental economic conditions must be watched.  If the economy remains sluggish, then this may send copper prices lower in the intermediate term.”

After copper futures briefly reaching two-year lows this time last month, a new up-trend seems to be emerging.  I will be looking to enter long copper futures on pull-backs only in the near-term.

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