While China off on the National Dragon Boat holiday yesterday, markets continue to slide.
Throughout the month of June, Copper has fallen A$600/t and Aluminium is also down around A$120/t. It has been a difficult month with very little positive market news on the back of a lack of positive sentiment in the markets.
With the average exchange rate for the month sitting around 0.7715, the Australian dollar has been rather steady throughout June, currently trading around 0.7726. Sometimes when we see LME prices rise or fall, the opposite can be said of the AUD exchange rate which tends to act as a buffer reducing the peaks and troughs in metal prices in AUD terms. With the steady dollar this month however, AUD prices are closely following the LME price falls.
Please find the following article for your perusal;
**** DJ Copper Slips on Demand Outlook **** By Ira Iosebashvili
Copper prices edged lower Monday, as a shaky global economy raised concerns about demand for the industrial metal.
Prices are down 12% from their May highs, as investors worry about growth in China and the U.S., the two largest consumers of the industrial metal, respectively. A series of government-initiated stimulus programs have failed to steady the economy of China, which accounts for 40% of the world’s copper consumption. A recovery in the U.S., meanwhile, has been less dramatic than expected. Copper is heavily used in manufacturing and construction, making it sensitive to the countries’ economic fortunes.
“The copper price is a reflection of investors’ pessimism regarding the global economy,” said George Gero, managing director at RBC Capital Markets.
**** DJ Sliding China Alumina Price Drags Down Australia Commodity’s Value ****
Australian alumina prices have dropped and, thanks to China, Credit Suisse doesn’t think this will be the end of the commodity’s retreat. The price in China has been falling fast this year due to “severe overproduction,” outpacing declines in the Australia alumina price, says the bank. But traders are playing that arbitrage and now dragging down the Aussie price which lost US$11 in just two days last week, to trade at roughly US$321/ton, says Credit Suisse. “There are currently lots of alumina cargoes hunting buyers in the Pacific market, providing a catalyst for prices to step down,” it says in a note.