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MARKET COMMENTARY
Even though copper made a weak start to the month of ay, the rest of the month also copper prices rose. London copper prices was slipped to a near two-week low on 4th of May on fears of excess supply, as some producers looked set to resume operations and demand took a hit from the coronavirus outbreak. Three-month copper on the London Metal Exchange (LME) fell to $5,060 a tonne by, its lowest since April 22.
Industrial metals prices advanced on remaining of the May on hopes for a pick up in economic activity as some U.S. states laid out plans to ease coronavirus-driven restrictions. Also Copper rose on a, buoyed by a rebound in China's demand for the manufacturing material and an unexpected rise in the country's overall exports in April.
China's April exports rose 3.5% from a year earlier, marking the first positive growth since December last year, customs data showed. China's unwrought copper imports rose 4.3% in April from the prior month, according to Reuters calculations based on customs data, boosted by an economic recovery from the coronavirus outbreak and favourable prices.
Gains in copper, however, were capped by simmering trade tensions between Washington and Beijing. Some countries have announced plans to gradually remove restrictions that were imposed to contain the coronavirus pandemic, and governments around the world have been providing stimulus programmes to support their ailing economies.
London copper boosted by expectations of better demand for metals as certain countries started to ease lockdowns put in place to curb the coronavirus pandemic. Australia, France and Spain are slowly opening their economies, while the United Kingdom - which has the second-highest virus death toll in the world - introduced some limited easing of restrictions.
Copper, used as a gauge of global economic health, has leaped 19% on the LME since March 19, when the contract hit a 45-month low, on improved demand from top consumer China, supply shortage worries and hopes for a pick up in global economy. LME copper, as demand for the red metal was still under pressure to what many describe as a long and bumpy road to recovery ahead.
Copper prices declined on week of 11-15 May as traders fretted about signs of a second wave of coronavirus infections that could add more pressure to the already-hit global economy. Copper prices extend losses after the U.S. Federal Reserve chief warned of an "extended period" of weak economic growth, sparking concerns of lean demand for the metal.
Copper prices climbed on 18th of May as the reopening of economies paralyzed by the coronavirus crisis boosted hopes of a revival in demand for metals.
Copper prices retreated from a two-month high on 21th of May as worries about the economic damage from the COVID-19 pandemic offset optimism over a potential vaccine. Three-month copper on the London Metal Exchange climbed to $5,464 a tonne. The last wee of May Copper prices fell on Wednesday as Sino-U.S. friction over Hong Kong quashed initial euphoria following the easing of lockdown restrictions in many countries. London Metal Exchange (LME) ended the May from $6,097.53 level with %3.8 monthly advantage.
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London copper started the year on a positive note after U.S. President Donald Trump set a date for signing a Phase 1 trade deal with China, top producer Chile's output fell and Beijing cut banks' reserve requirements. China's central bank (PBOC) cut the amount of cash that banks must hold as reserves, releasing about 800 billion Yuan ($114.91 billion) in funds to shore up its slowing economy. Copper prices improved further on optimism that the world's top metals consumer would also sign a phase 1 trade deal with the United States on 15th of January. London copper steadied second week of Jan., lifted by low inventories and tight supplies amid concerns about any impact from Iran's strike on U.S. forces, while a weaker dollar also supported prices. London copper continued to moved higher as most industrial metals rallied on signs that Iran and the United States were keen to de-escalate the Middle East standoff.
Washington and Beijing signed a Phase 1 trade deal on 15th January that will roll back some tariffs and boost Chinese purchases of U.S. products, defusing an 18-month row that has hurt global economic growth and metals demand. After the deal copper edged up to $6343 on 16th of Jan. But investors are worried that the pact would not substantially boost metals demand as the deal left a number of sore spots unresolved, while demand has not improved significantly to support prices. Industrial metals started to fell on 17th of Jan, pulled lower as negative sentiment spilled over from stock markets.
After person-to-person transmission of a new virus was confirmed in China oh 21st of January, and following a rating downgrade for Hong Kong. The new virus causes a type of pneumonia and belongs to the same family of coronaviruses as SARS. The deaths from the new flu-like coronavirus, started in Wuhan city in China. London copper, falling for a 12th straight session, as a jump in inventories and the spread of a flu-like virus in top metals consumer China weighed on prices. China was locked down some cities to constrain the virus, feared to spread even faster as millions of Chinese travel during their Lunar New Year holiday (started to 24th of Jan). The Chinese government, as a result, said it would extend the week-long Lunar New Year holiday by three days to Feb. 2 in a bid to slow the virus spreading. China is the world's biggest copper consumer and a major user of many other metals. Fears that the epidemic would stall economic activities have dented metals demand.
London copper recorded for their biggest monthly decline in eight months as the coronavirus epidemic raised fears of a slowdown in demand from top metals consumer China. Three-month copper on the London Metal Exchange (LME) has fallen 9.8% so far in the month, for its sharpest drop since May 2019.
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Copper prices are widely used as a gauge of economic health, which has been hurt by the prolonged trade war between the United States and China has hurt global growth outlook and demand for the red metal, as well as volatilities caused by the lengthy Brexit negotiations.
In early October, the U.S. dollar index was at its highest (99.667) since May 2017, making metals priced in the U.S. dollar including those on the LME more expensive for users of other currencies. The LME copper fell to $5588, its lowest since May 2017, on first day of October due to a stronger dollar, but trading was thin as traders in top consumer China went on a long holiday. The United States on 2nd October said it would slap 10% tariffs on European-made Airbus planes and 25% duties on French wine, Scotch and Irish whiskies, and cheese from across the continent as punishment for illegal EU aircraft subsidies. The dollar start to eased on Thursday, sliding to fresh one-week lows against the euro and yen as investor anxiety deepened over fresh signs of slowing U.S. economic growth and a broadening of global trade friction. The discount for cash copper versus three-month metal on the LME rose to $35 first week of October, the most since August last year, pointing to plentiful availability.
London copper advanced after 9th October following U.S. President Donald Trump described trade talks with China as "very good", raising hopes of breakthrough in the tariff war between the world's two biggest economies. But gains were limited as the markets remained cautious about prospects of a deal between the two biggest global economies until the second half of October. London copper rose on $5941.5 (the highest since 16th Sept.) 29th October because of worries of a supply disruption in Chile, the world's biggest producer, lent some support. But LME copper gave back soma gains because of weak China data and anxious about China-US trade deal.London copper has been closed October with gains %1.65.
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Copper prices dropped on May, pressured by concerns over the outlook for the global economy and metals demand as Washington and Beijing struggled to salvage a deal to end a bitter trade war. The trade conflict between the world's top two economies escalated on first wee on May with the United States hiking tariffs on $200 billion worth of Chinese goods after President Donald Trump said Beijing "broke the deal" by reneging on earlier commitments made during months of negotiations. Beijing has called on Washington to show "sincerity" if it is to hold meaningful trade talks, after the United States put China's Huawei Technologies Co Ltd, the world's biggest telecoms equipment maker, on a trade blacklist.
Investors remained cautious after weaker-than-expected Chinese retail sales and industrial output data. The figures for April largely pointed to a loss of momentum, after surprisingly upbeat March readings had raised hopes the economy was slowly getting back onto a firmer footing and would require less policy support.
The last week of May London copper prices find support as a new blockade at MMG Ltd's Las Bambas mine in Peru lent support to prices, although gains were capped by ongoing U.S.-China trade tensions. On 31th of May LME coper edged down to 5 months low to .$5812.5. 3m LME copper closed May with a loss of 9.5%.
London copper made weak start to June because of the negative datas. Growth in U.S. manufacturing activity slowed in May to its weakest pace in over two years as factory managers raised concerns about a trade war between the United States and China, a national survey showed. Manufacturing activity in the euro zone contracted for a fourth month in May and at a faster pace, as the U.S.-China trade war, slumping automotive demand, Brexit and wider geopolitical uncertainty took their toll, a survey showed. LME copper edged down to $5740 on 7th of June because of trade dispute, signs of slowing economic growth and dissappointing US jobsa data weakened the demand outlooks for metals.
The direction of the wind changed with strike and Fed definitions. Copper prices rose last week supported by supply disruptions as a labour strike halved output at one of the world's largest mines in Chile and Glencore's Zambian smelter shut for refurbishmentThe Codelco-owned Chuquicamata mine, which produced 320,744 tonnes of copper in 2018, headed for its fourth day of a stoppage after a failed labour deal a week before. In Zambia, Mopani Copper Mines has shut down its Mufulira smelter for major refurbishment, the Glencore-owned company said late on 17th June.
The U.S. Fed on Wednesday left interest rates unchanged as widely expected, but said the case for lower rates was building, suggesting it could ease monetary policy as early as next month amid rising trade tensions and concerns about weak inflation.The dollar index eased against a basket of six major currencies. A weaker USD offset some concerns about the upcoming U.S.-China trade talks. Reports of the call between the two presidents suggested that their meeting at the G20 would only cover strategic issues, raising concerns that an agreement was still some way off. After tested $6027 level last week, LME copper start new week with $5915-6035 band.
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Copper moved steadily higher during February, getting to an eight-month high towards month-end. The metal has been a primary beneficiary of growing optimism surrounding the US/Chinese trade talks, but the fact that LME inventories have also been shrinking of late has also helped the rally. CRU notes that aggregate exchange inventories (COMEX, LME and SHFE) still remain at four-year lows. Meanwhile, refined copper and concentrate imports into China are running at a brisk pace.
The last days of March, we saw the positive impact of the US/Chinese trade talks will start to wane as many markets have largely discounted a deal by already moving higher. Market focus should revert back to the deteriorating macro situation where in copper’s case, the situation in
China will be of primary interest. London copper and most other base metals rose on 21.03.2019, backed by a softer dollar after the U.S. Federal Reserve abandoned plans for a further rate rise this year, and by a lack of near-term supply. LME copper edged up to $6555.5 having touched a near nine months high. But most base metals fell on this week as investors worried about the prospect of a recession in the United States, the world's biggest economy. Concerns of weaker economic growth are likely to keep downward pressure on commodities for the time being. Three-month LME copper is trading on $6360 now.
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Copper traded roughly within a $6000/ton range between early December to mid-January, with prices fluctuating between $5725–$6199 in January. No doubt, the more optimistic tone generated by the recently concluded US/Chinese trade talks have helped stabilize copper of late, although growing macro weakness in China will likely keep a more significant rally in check. The latest Chinese PMI numbers (both the official and private readings)have dipped into contraction territory for the first time in years. These are correlate quite significantly with copper prices, perhaps better than almost any other indicator we have seen.
Meanwhile, the latest ICSG numbers has the global refined copper market in a 595,000-ton deficit through September of last year compared with a 226,000-ton-deficit in the same period a year earlier. The ICSG’s deficit reading to be excessively high and expect the 2018 number to fall from where the ICSG has it once the year is complete.
In other ke developments, Chile's copper production recovered nicely in 2018, increasing 6% year-to-date through November. Given that China has been reducing its scrap imports considerably for much of the past two years, we suspect that Chilean refined units will find a ready home going into China as substitute material for scrap and so the increase in Chilean production should readily be absorbed China imported 4.87 million tons of unwrought copper in the first eleven months of 2018, an increase of 14.9% from a year earlier; ores and conc imports reached 18.25 million year-to-date through November, up 16.4% year-on-year.
The ShFE was closed between 04.02.2019-08.02.2019 session for China's Lunar New Year holiday, re-opening today (on Feb. 11). LME Copper prices were supported by easing U.S.-China trade tension. The first week of Feb copper reached $6,289.5 a tonne although concerns over slowing factory activity in China limited gains (while China was closed). The trade volume was very low. LME closed down 0.83 %at $6,201.5 a tonne on Friday after U.S. President Donald Trump said he did not plan to meet China's Xi Jinping before a March 1 deadline for the two countries to achieve a trade deal. LME copper closed first week of February with 1% weekly gain.
Today Chinese trader turn back and copper edged down 1.02 % on profit taking. There are no ECB and FED meetings on February. We have been waiting March 1 deadline for the two countries (China and US) to achieve a trade deal. If China and the US agree on March 1, we expect a bullish trend on copper.
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Copper ended lower in March for a third month in a row. Copper was trading between $6532-$7064 before ending at $6740.5. For the first quaret of 2018, LME copper edged down 7 percent, not exactly a good start to the year. Several reasons are behind the decline, the most prominent being trade war anxitous between US and China. Both actions sent a chill through ferrous and nonferrous complexes, as investors became rightly concerned that the world’s two most powerful economies could get embroiled in an escalating trade war. A steady increase in copper exchange stocks also weighed on prices; combined stocks at both LME and SHFE were up roughly 18% this past month and have almost doubled vs. this time last year.
The refined copper market ended 2017 with a deficit of about 163,000 tons, this according to the latest ICSG report, up from the group's original projection of 150,000 tons. The ICSG expects the 2018 deficit to shrink to 105.000 tons, not a particularly high number and one that could easily flip into a surplus if Chinese demand starts to flag. So far in 2018, there is not much evidence of that. On the trade side, China imported a little over 544.000 tons of refined copper in the first two months of 2018 — up 6.3 percent year-on-year.
For the year as a whole, Antaike sees Chinese refined consumption rising by 3.3 percent to 11.1 million tons, while domestic refined output is expected to hit 8.35 million tons, a 4.3percent y-o-y increase. This would mean that China would still need to import roughly 3 mln tons of copper, down 7.5 percent from 2017 levels (this according to Antaike), but a sizable number nonetheless.
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The market was remained strong with increasingly confident about its place in the electric car movement, with producers and traders at the London Metal Exchange Week annual gathering speaking positively about the growth in demand expected from this sector.
Dollar sagged on early November, knocked away from eight-month highs versus the yen, as Treasury yields slipped on uncertainty over whether the Republicans can pass their tax bill in a timely manner.
The supply side,The Indonesian unit of Freeport-McMoRan Inc has temporarily shut the main supply route to its Papua mine after a shooting incident, a spokesman said, amid escalating tensions between security forces and an armed rebel group in the area in mid of November. Global miner Rio Tinto Plc restarted the smelter at its large Kennecott mine in the United States on 20th of November after a nearly six-week outage but force majeure. Workers for the two largest unions at Southern Copper Corp in Peru said on 22th of November hey had started an indefinite strike, demanding a fair share of profits, while the company said the stoppage had not affected operations. The supply desruptions supported to copper. LME copper edged up $7024 on 27th of November.
China's economy cooled further last month, with industrial output, fixed-asset investment and retail sales missing expectations. The last week of November copper prices fell as concerns over demand in top consumer China and declining oil prices push investors to sell. LME copper price in November fell by 1.3 percent.
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Copper and other metals have been supported by relief that China's economy is proving more resilient than expected, partly due to easier liquidity ahead of China's national congress later this year which has fed metals demand. A pick-up in the industrial sector helped China post better-than-expected second quarter economic growth as finance and real estate expansions slowed to multi-year lows. China's exports and imports grew much less than expected in July, raising concerns over whether global demand is starting to cool even as major Western central banks consider scaling back years of massive stimulus support. China's copper imports rose 8 percent in July from last year as the availability of credit improved, even as concerns lingered about manufacturing activity.
The Federal Reserve kept interest rates unchanged on 27th July and said it expected to start winding down its massive holdings of bonds "relatively soon" in a sign of confidence in the U.S. economy. A gauge of U.S. factory activity slid from a near three-year high in July amid a slowdown in new orders and consumer spending barely rose in the prior month, setting the stage for a moderate economic expansion in the third quarter. Federal Reserve policymakers appeared increasingly wary about recent weak inflation and some called for halting interest rate hikes until it was clear the trend was transitory, according to the minutes of the U.S. central bank's last policy meeting.
The dollar dipped, making dollar priced metals cheaper for non-U.S. investors, while world stocks, seen as a proxy for growth, breached new records on better-than-expected company earnings and strong U.S. jobs data. North Korea were the right response to a series of missile tests, but dialogue was vital to resolve a complex and sensitive issue, now at a "critical juncture". North Korea said it is "carefully examining" plans for a missile strike on the U.S. Pacific territory of Guam, just hours after U.S. President Donald Trump told the North that any threat to the United States would be met with "fire and fury”. The dollar firmed this week after North Korea's leader signalled that he would delay plans to fire a missile near Guam, further easing tensions and prompting investors to move back into riskier assets. Also
Copper prices were at their highest since 2014 as rises across most industrial metals triggered pre-set buy orders and a wave of speculative buying and supported by a weaker dollar and increasingly upbeat views about China's economic growth and metals demand. Benchmark copper was 2.5 percent higher at $6,580 on 17th August, its highest since November 2014. But the gains came despite data showing China's home price growth slowed in July, reinforcing expectations that property price growth may stagnate over the course of the year, a negative for industrial commodities. Also metals were set in downward motion on 17th August by weaker than expected U.S. industrial production, which rose only 0.2 percent in July.
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Industrial metals markets will be watching manufacturing, investment, property market and loans data for clues on the strength of its copper demand over coming months. China accounts for nearly half of global copper demand, estimated at around 23 million tonnes this year. Activity in China's manufacturing sector in June quickened from the previous month, in a reassuring sign the world's second-biggest economy kept up a reasonable pace of growth after a solid first quarter.
Federal Reserve policymakers were increasingly split on the outlook for inflation and how it might affect the future pace of interest rate rises, according to the minutes of the Fed's last policy meeting on June 13-14 released. The U.S. economy continues to churn out jobs and grow at a steady pace, with investment and consumer confidence both healthy and only moderate signs of risk in financial markets, the U.S. Federal Reserve said. London copper inched up on Monday after a solid U.S. jobs report buoyed hopes that an economic recovery is taking root in the world's top economy, spurring appetite for riskier assets. The data followed expansion in China's manufacturing sector in June, which also underpinned investor demand for metals. U.S. stocks and bonds rallied July 14, with the S&P 500 Index reaching a new intraday high, as U.S. inflation data came in short of Federal Reserve expectations, spotlighting concerns of some central bankers about additional interest rate hikes.
The dollar fell to a more than one-week low against a basket of major currencies, after U.S. President Donald Trump's eldest son released an email chain citing Russian support for his father before last year's U.S. election. A weaker dollar typically draws interest for U.S. dollar-denominated commodities such as copper from investors outside the United States using other currencies. The U.S. dollar hit a 10-month low against a basket of currencies, making dollar-denominated commodities cheaper for holders of other currencies and potentially boosting demand.
Workers at the Zaldivar copper mine in Chile, owned by Antofagasta and Barrick Gold Corp, voted to approve a strike on Monday after talks with the company failed. The nearby Centinela mine is also in negotiations over strike action. Together the two mines produced 340,000 tonnes of copper in 2016.
China's economy grew 6.9 percent in the second quarter from a year earlier, faster than expected and in line with the first quarter's growth. Analysts polled by Reuters had expected the economy to expand 6.8 percent in the April-June quarter.
While oil advanced last week, prices in New York are still below $50 a barrel on concerns expanded global supplies will offset output curbs by the Organization of Petroleum Exporting Countries and its allies. The group’s output climbed last month to the highest this year as members exempt from the deal -- Nigeria and Libya -- pumped more and others slipped in delivering their pledged curbs.
Workers voted to approve a strike at a mine in Chile, following industrial disputes in Indonesia and at the world's biggest copper mine, also in Chile, earlier in the year, that whittled into copper supply. Copper prices hit 4-1/2-month highs on July 17 as better-than-expected economic data from top consumer China and a weak dollar helped reinforce expectations of strong demand. Benchmark copper on the London Metal Exchange ended up 1.2 percent at $6.003 a tonne from an earlier $6,022.5, its highest since March 2.
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