Copper Analysis 2014-03-26

It has been over a year since my last copper analysis, as I have been busy with actual work. My last run to the yard was shocking as prices have dropped. Why?

Here are some charts for you viewing pleasure.

First is a daily chart...
http://s27.postimg.org/l07whu527/2014_03_26_D.jpg

Second is the weekly chart...
http://s27.postimg.org/wa0mcsa3j/2014_03_26_W.jpg

Last is a chart that goes back to 2009...
http://s27.postimg.org/th7esr9r3/2014_03_26_2009.jpg

As you can see, copper has not been this low since 2010. I have heard of copper being a leading indicator for the economy, because it is used everywhere. Homes, factories, electronics, etc. Where she is going from here is anyone's guess, hopefully not to 2009 levels.

Happy Scrapping.

Basically, the world has cut back or stopped buying. The copper market now depends largely on U.S. production.

Watching other commodities, it seems that one method of getting people to sell out their stock is to raise prices to ridiculously high levels. The get-rich-quick boys sell out near the top. Then prices are pushed lower and lower. And lower. And lower. Finally, the stay-poor-forever boys get tired of the bleeding and sell out near the bottom. After that point, prices get back to a reasonable equilibrium.

Gold prices are lowered by massive selling to disrupt supply and demand. Admittedly, copper is NOT gold, but it is a real commodity asset in the paper world of derivatives and futures built on margin.

Take a look at the 5-year LME copper stocks chart. Does this imply an oversupply, or manipulation?


Kitco - Spot Copper Historical Charts and Graphs - Copper charts - Industrial metals

China is a wild card, but I'd suspect that bankers and speculators probably affect the price of commodities more than actual demand for assets right now.

Speculators don't affect long term pricing trends, just small blips in one direction or another for a few months as they buy futures or short them. Traders are looking to see if Russia invades Ukraine which will cause major sanctions and loss of trade (less copper needed).

for some of us who deal in quantity a few months IS a longtime.:(

I don't know if this is true or not but heard on the Fox Business chanel that China was getting ready to start another building boom. When will this staert? I don't know. I do know that China has a stock pile of copper,steel, aluminum and what ever but sooner or later they'll have to replenish their stock and hopfully the prices will go up.

Quote:

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Originally Posted by happyscraper

I don't know if this is true or not but heard on the Fox Business chanel that China was getting ready to start another building boom. When will this staert? I don't know. I do know that China has a stock pile of copper,steel, aluminum and what ever but sooner or later they'll have to replenish their stock and hopfully the prices will go up.

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Next Wednesday at 10:00 Eastern US time. Kidding. I quit trying to predict these things. Too many influences. Some natural. Some manufactured. All designed to trip up any predictions.

china has whole cities built with nobody living in them, can't see them doing another building boom anytime soon.

Yeah I saw a whole 60 minutes clip about these ghost towns that are brand new. Pretty crazy they have apartments, malls, and every thing else a modern city would have except residents.