Morning Copper Market Report Mon 15 Jul 2013 07:18:14 CT Some traders felt that the copper market was apparently discouraged by Chinese economic news overnight, as copper prices during this morning's early action were trading as much as 7 cents a pound below last week's highs. In retrospect, the Chinese data might have left many questions in place toward the Chinese economy, as the market wasn't able to rekindle hope of fresh easing action from the Chinese central bank in the wake of that nation's overnight data flows. Other traders felt that copper might also be somewhat undermined by suggestions from the US Fed late on Friday, which hinted at tapering before the end of this year. News of another daily decline in LME copper exchange stocks leaves that recent trend intact, as they have fallen for 7 straight sessions and during 13 of the past 15 sessions, which might lends further support to copper prices during today's trading. ------------------------------------------------------------------------------------------------------------------------------------------------- Commentary: Sniff, sniff....something smells here. LME stocks declining ? How can that occur ? Are the mines slowing their output ? Or is China purchasing and stockpiling (again) ?
Home construction lowest in almost a year July 17, 2013, 8:46 a.m. EDT WASHINGTON (MarketWatch) â Construction on new U.S. homes fell in June to the lowest rate in almost a year, after a big slide in apartment buliding, according to government data released Wednesday. Housing starts fell 9.9% in June to a seasonally adjusted annual rate of 836,000, the lowest level since August 2012. Starts for buildings with at least five units fell 26.7%, while starts for single-family homes declined 0.8%. ----------------------------------------------------------------------------------------------------------------------------------------------------------------- Commentary:Another dagger in the back of copper....as demand remains soft.
Copper is just reflecting the weak state of the Chinese economy. A good leading indicator is the stock market of Chile, there is no hope for Dr.Copper until it starts again.
In the past 4 months, the stocks of copper in Shanghai fell by 30%. The reduction process is not yet completed, but in the past, some 4 months percentages of reduction of 40% have intercepted the primary bottom.
Wow, we broke $3.20 today as all markets go into a frenzy of "risk on" behavior. I think another great short opp is coming up here.
Well, if you refer to the message about the Chilean stock exchange, then I can confirm that the correlation with the copper price is quite high, as this index is mainly composed by mining stocks.
...in fact I was referring to inventories. In the initial phase of destocking, prices naturally fall as the buyer "buys" less as the demand is too low to justify an increase in inventories.