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Copper Continues to Tumble

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Copper Continues to Tumble

Copper prices on the London Metal Exchange (LME) fell for a third straight session on Tuesday thanks to weak demand and a strong U.S. dollar. The dollar has been surging on expectations the U.S. Federal Reserve will raise interest rates again next month.

“Base metals suffered amid depressed demand from investors. While a strong dollar didn’t help, rising stockpiles in various metals were the main instigator,” ANZ analysts said in a note.

Three-month copper on the LME fell 0.2% to $6,034.5 a ton, declining for the third session in a row and sixth session out of the last seven. Copper fell 4.36% last week. The red metal has fallen 16.7% for the year. Copper opened for trading this morning at $2.70 a pound. Click on the chart below for up-to-the-minute pricing.

Mining News

The world’s biggest miner posted the lowest quarterly copper production this year in the third quarter, according to Chile copper agency Cochilco. Codelco reported declines across all of its mines in September as ore grades fell an average of 5% in the first nine months of the year.

The International Copper Study Group forecasts a production deficit of 90,000 tons this year, more than double the shortfall forecast in April. According to Codelco, output for the first nine months of the year was 41,000 tons lower than in 2017.

Asia Copper Week

Metals traders are arriving in Shanghai for the annual Asia Copper Week event, gathering in China at a time when the outlook for demand in the world’s biggest consumer of the commodity is clouded by the U.S.–China trade war.

Copper Prices – 45-Year Historical Chart

Here is something we came across this week. A look at the price of copper over the last 45 years. The roller coaster has gone to new heights over the last decade. The chart shows the ups and downs have been constant over the years.

David Lilley from Drakewood Capital Management recently told Bloomberg that copper has the potential to rocket and added, “if everybody who’s sold it in the past three months wants to buy it back, I’m not sure who’s going to sell it to them.’’

The Market This Week – November 12 – 16

This week, traders are focusing on U.S. inflation data after the Federal Reserve indicated it is on track to hike interest rates again in December and early next year.

Inflation data set to be released tomorrow is expected to show U.S. consumer prices rose in October. Investors will get another update on the health of consumers from Thursday’s retail sales numbers, which are expected to show an increase from the previous month.

Metals traders will also be watching a speech by Fed Chairman Jerome Powell in Dallas on Wednesday, where he is expected to discuss national and global economic issues.

Here is a look at significant events likely to affect the markets this week as put together by Investing.com.

Monday, November 12

Japan released data on producer prices and a preliminary report on machine tool orders.

San Francisco Fed President Mary Daly spoke at an event in Idaho.

Tuesday, November 13

Australia is to publish data on business confidence.

The UK is to release its latest employment report.

The ZEW Institute is to report on German economic sentiment.

Fed Governor Lael Brainard is to speak at an event in Philadelphia.

Wednesday, November 14

Japan is to release preliminary data on third quarter growth.

China is to publish figures for fixed asset investment and industrial production.

The euro zone and Germany are to release preliminary data on third quarter growth.

The U.S. is to release data on consumer price inflation.

Fed Governor Randal Quarles is to speak in Washington.

Later in the day Fed Chairman Jerome Powell is to speak along with Dallas Fed President Robert Kaplan in Dallas.

Thursday, November 15

Australia is to publish its latest jobs report.

The UK is to report retail sales figures.

The U.S. is to release data on retail sales along with data on manufacturing activity in the New York and Philadelphia regions and the weekly report on initial jobless claims.

Fed Governor Randal Quarles is to speak in Washington.

Fed Chairman Jerome Powell is to speak in Dallas.

Friday, November 16

European Central Bank President Mario Draghi is to speak at an event in Frankfurt.

Canada is to round up the week with data on manufacturing sales and foreign securities purchases.

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Jim Williams

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