After last week’s copper crash it is pleasing to report that the copper markets have steadied and we hope will remain steady for the foreseeable future. It remains a mystery why copper can fall 10% in 2 days and then trade flat as though nothing happened.
The AUD/USD continues to trade around the 82 cent levels and is defying the forecasts of a drop to 75 cents.
**** DJ Copper Closes Down Ahead of China’s Fourth-Quarter GDP Data **** By Ese Erheriene
LONDON–Copper futures closed down on the London Metal Exchange on Monday, as inventory increases weighed on prices. The LME’s three-month copper contract was down 0.8% at $5,672.00 a metric ton at the PM kerb close. A 10,200-ton increase in LME inventory “[took] the edge off prices,” said Standard Bank in a note. The increase in inventory points to greater supply, which suppresses prices.
Furthermore, the market showed its nerves ahead of a swathe of Chinese data due out Tuesday, including the fourth-quarter gross domestic product data report. “Depending on the results of the report, there is some speculation that President Xi Jinping may downgrade the 2015 growth forecast to 7.0%,” said Jasper Lawler, a market analyst at CMC Markets.
China is the biggest consumer of the red metal, and its economy strongly affects copper prices. When its economic health is seen to be slowing, demand falls and prices drop. Most of the base metals were in the doldrums at the end of trading. Aluminum closed down 1.5% at $1,818.00 a ton, zinc closed 0.9% lower at $2,079.00 a ton, nickel ended the session down 2.1% at $14,475.00 a ton, and tin closed down 0.4% at $19,325.00 a ton. Only lead was higher, rising 0.4% to $1,857.00 a ton