Another strong week of trade on metal markets has seen favourable prices coming through on most metals. It still seems a little surprising that the main reason being reported for this rally is that a stimulus package is expected. It just doesn’t seem to be a solid reason for growth in metal prices, and as a result although prices are heading north, confidence from the manufacturing sector and metal traders do not seem to share the same sentiment as yet.
We will continue to watch LME markets throughout the week with much interest, however it may be fair to say that the most interesting factors throughout the week will be to see what announcements are made by the Chinese and US governments.
As you may know, in July 2003, Sell & Parker initiated the “Metal for Miracles” programe. The company donates $1.00 for every tonne of scrap steel recycled to the Sydney Childrens Hospital, Randwick. The program funds Doctor’s fellowships and Nursing scholarships in the Intensive Care Ward.
**** LME Copper Showing No Sign Of Reversal –Sucden **** By Francesca Freeman @ dowjones.com
1427 GMT [Dow Jones] LME metals hold on to earlier gains, with 3-month copper currently 1.5% higher on the day at $8,086/ton. While copper’s technical indicators suggest the metal has “nudged into overbought territory,” copper is not showing any signs of a reversal just yet, says Sucden Financial.
**** Copper at Four-Month High on Stimulus Hopes ****
–Comex December copper ends up 1.2% at $3.6885 a pound –Signs of slowing industrial production in China spark hopes of stimulus –Traders look to Fed for more easy money
By Tatyana Shumsky
NEW YORK–Copper futures rallied to their highest level in four months amid rising expectations of supportive measures from China and the U.S.
Investors saw glimmers of hope in weaker economic data out of China, wagering that slowing industrial production would prompt the government there to institute a new growth-boosting effort. China’s industrial production rose 8.9% in August from a year earlier, missing forecasts of a 9% gain and slowing from July’s 9.2% on-year increase.
Efforts to stoke economic activity in China, which accounts for about 40% of the world’s copper demand, are widely expected to lift copper prices.
Copper traders are also looking ahead to Thursday, when the Federal Reserve is due to deliver its latest policy decision. Weak economic data, including last week’s monthly jobs report that showed the economy added just 96,000 new nonfarm jobs in August, have fanned expectations that the central bank will launch a third bond-purchasing program to spark business activity.