This week we have seen worrying falls in our primary base metals of Copper and Aluminium. From the beginning of the month we have seen Copper fall around 5% (USD426/t) with Aluminium also heading south in USD terms (USD55/t). In Australian dollar terms more recently we have been shielded many of the gains and falls of the market thanks to our commodity driven currency. In the past fortnight however, this trend has failed to help as at the Aussie dollar continues to trade around 1.035, very close to the running average of the month.
Although this is a far cry from a crash, it is certainly a fall that was being talked about in recent weeks / months by many of the scrap traders around the world. It may sound silly, but as the prices come down slightly, I expect the market may become more confident to buy at the new levels. As noted in previous updates, the problem with that scenario is that many traders prefer to sit back and wait until the market settles before coming back in to buy.
**** DJ BASE METALS: Copper Slips On Weak US Housing Data April 16, 2012 ****
NEW YORK (Dow Jones)–Copper futures turned lower Monday on data showing U.S. home builders’ confidence in the housing market slipped in April for the first time in seven months. The most actively traded contract, for May delivery, was recently 2.35 cents, or 0.7%, lower at $3.6035 a pound on the Comex division of the New York Mercantile Exchange.
The National Association of Home Builders said its housing market index was 25 in April, from 28 in March. This was the first decline since September 2011 and the reading missed expectations of 28. Copper is widely used for electrical wiring and water plumbing in residential construction. A bearish outlook for the sector is considered a sign of weaker future demand for the industrial metal