After a long weekend here in NSW and we have come back to work with the markets still in turmoil. This week China have national holiday which we believe has come at a perfect time for Chinese traders and manufacturers as they prefer to sit back with a wait & see approach to the market. With the Shanghai metal market also closed this week, we will be closely monitoring the LME to see what direction the market takes throughout the week. We hope to be able to hold prices firm for the week, however if the turmoil continues, there may be need for another mid week update.
Please find the following article for your perusal;
Copper Eases As EU Worry Outweighs US ISM Boost By Matt Day Of DOW JONES NEWSWIRES
Copper futures ended slightly lower Monday, as investors weighed a gloomy outlook for the euro zone against a better-than-expected reading on U.S. manufacturing. Futures early Monday fell by as much as 5%, dropping below $3 a pound for the first time since July 2010. Futures Monday declined along with other growth-sensitive assets as the Greek government said it would miss its deficit targets this year. The news added to investor concerns that the debt-laden country won’t be able to secure the financial support necessary to stave off a default. The financial turmoil in Europe has caught copper traders’ attention because a credit crisis there would likely rattle through industrial markets, potentially upsetting activity in copper-heavy sectors such as construction and manufacturing. Copper is sensitive to shifts in the economic outlook because of its widespread uses across industries. Copper regained its ground and pushed into positive territory near midday after the Institute for Supply Management said its index of manufacturing activity showed expansion last month. The ISM’s purchasing managers index stood at 51.6 last month, above expectations for a reading of 50.4 and a bullish signal for industrial commodities. Readings above 50 indicate expanding activity.
Copper’s 25% decline last month came as investors slashed their expectations for global growth, in part due to a series of worse-than-expected readings on manufacturing in China, Europe and the U.S., the top three copper consumers. In addition to the ISM data, copper was also supported Monday as some investors viewed the market’s recent declines as a good opportunity to buy, said Matt Zeman, head of trading with Kingsview Financial. “I’m seeing a little bit of bargain hunting out there. The question for copper is how much downside is left? I don’t see us going a whole lot lower.” Money managers pared their bearish bets against copper during the week ended Tuesday, according to data from the Commodity Futures Trading Commission. Despite the declines, such speculative investors still held more bets that prices would fall than that they would rise for the fourth time in six weeks, a sharp reversal from almost two years of bullish bets by speculators. ”The overall picture for copper is still decidedly bearish,” Standard Bank analyst Marc Ground said in a note. “The lack of investor support could expose copper prices to downside, especially as markets grow anxious about another recession.”
Trading in copper is expected to be thin this week, with top consumer China on holiday and some trading desks lightly staffed during the London Metal Exchange’s annual conference in London.