A reasonably steady week with a bit of a dip at the end would probably be the best way to describe markets this week. LME prices have remained steady, although most physical export markets have been hesitant to take direction from the LME and financial markets.
The steady trade has also flowed through to the exchange rate market with the Hedge Settlement Rate (interbank trade rate) reporting 1.04## every day in the past 5 days of trade.
In China, the nation prepares for a week-long mid-Autumn and Chinese National Day public holidays with the Shanghai Futures Exchange and other businesses closed from September 29 to October 7. No statistics exist for the number of accidental firework property burnings that occur on Chinese National Day, although we suspect it might be significant.
**** Renewed Growth Concerns Send Copper to 1-Week Low **** By Matt Day
NEW YORK–Copper futures fell to the lowest price in more than one week Monday, dragged down by ongoing euro-zone worries and a warning on the economic health of top consumer nation China.
Copper’s fall came after data on German business confidence were reported weaker than expected, and Spain continued its public silence about an official bailout request. A weekend meeting also showed French and German leaders at odds over plans to integrate Europe’s rattled banking system.
Adding to the gloom was a grim assessment of the Chinese economy’s performance in recent months from an adviser to the country’s central bank. China’s economy isn’t showing any signs of a rebound in the third quarter, as investment is constrained by cautious bank lending and spending, People’s Bank of China adviser Song Guoqing told a forum in Beijing on Saturday. China accounts for about 40% of world copper consumption.
**** DJ MARKET TALK: Copper Vulnerable To More Weakness -Standard Bank **** By Francesca Freeman @ dowjones.com
LME metals remain under pressure, with the potential for further weakness in the coming sessions, says Standard Bank. “With China going into an extended long weekend next week and a data-heavy week next week, we may see more liquidation as the week draws on,” it says. Still, copper remains above its 200-day moving average of $7,920/ton, a level that would have to be breached before more aggressive selling sets in, the bank says. “Given the backdrop of quantitative easing, this may be unlikely just yet,” it adds.
****RBS Mining Daily. China Sales.
The slowdown in China is having a knock-on effect for equipment makers. Chinese excavator sales have fallen 36 percent this year, according to JPMorgan. Caterpillar said last month it shut its main Chinese excavator plant for much of July