It’s been an interesting week in the metal markets with supply and demand calling the shots more so than LME prices. As we head toward the Christmas break, many traders and manufacturing plants are looking to reduce stockholdings heading into 31 December and as such are not pressuring the market with high prices. Metal markets themselves are reasonably steady, however demand for metals is rather weak.
Processors and manufacturers in China are also aware that Chinese import licenses expire at the end of the year, so many clients are unable to offer prices for fear of material arriving during a period when they are not licensed. It may seem a strange thing to happen, however last year licensing issues held up a number of shipments that could easily have resulted in distressed cargoes.
**** DJ Copper Eases as Japanese Data Spur Metal-Demand Worries ****
By Ira Iosebashvili
Copper prices fell Monday, as weak economic numbers in Japan sparked concerns regarding global growth and demand for the industrial metal. Copper for December delivery, the most-actively traded contract, was recently down 0.1% at $3.0445 a pound on the Comex division of the New York Mercantile Exchange. Japan’s economy shrank for a second quarter in a row, as a sales-tax increase earlier in the year continued to weigh on growth. With China, the world’s largest copper consumer, in the grips of a slowdown and Europe fighting to stay out of recession, the data was another negative for copper prices. Copper’s extensive use in manufacturing and construction makes it sensitive to economic data. ”The negative news…just keeps on coming,” Commerzbank analysts wrote. “Unless (Japan’s) economy gathers pace again soon, this is also likely to have a negative impact on demand for metals.” Copper closed at the lowest price in nearly four weeks on Thursday, after data from China showed slowing industrial output in October. Prices rebounded Friday, posting their largest one-day percentage gain in almost two months, buoyed by upbeat U.S. economic data.