Categories: Base Metals / General Market Commentary
Topics: General Base Metals / General Market Commentary

Copper price crunch

Copper price crunch

Frik Els

In European trade on Monday copper for delivery in December slipped to a near three-month low after worries about the global economic outlook weighed down the bellwether metal and speculators bet on further weakness ahead. Copper futures exchanged hands for $2.0640 per pound ($4,550 a tonne), down more than 1% from Friday's close and the lowest since June 16.

Shipments from the world's number three exporting country Germany unexpectedly plunged by 10% overall and 14% to non-EU countries in July, raising fears about the health of the global economy. Last week a reading of US economic activity levels by the Institute of Supply Management fell to its lowest level since February 2010. Chinese manufacturing activity has been picking up, but remains barely above expansionary levels.

Given its widespread use in transport, electricity systems, manufacturing and construction, copper is seen as a barometer of the health of the overall global economy. While other industrial metals and steelmaking raw materials have jumped in value this year, the bellwether metal is trading down 3% year to date following a 26% decline in 2015.

Large scale copper futures and options speculators  or "managed money" investors such as hedge funds on the Comex market in New York have taken an ultra-bearish view of the copper price.

To continue reading please click link http://www.mining.com/copper-price-crunch/