COPPER

FUNDAMENTALS

Copper ended modestly firm Thursday on expectation of another rate cut by Fed due to slowing US economy. Moreover prices rebound following release of substantially higher Chinese copper imports data and WBMS report of a deficit in copper market during the first nine months.  

China’s refined copper imports in Oct rose 43.6% on yr to 98,155 mt. Its total imports during Jan-Oct rose 92.3% on yr to 1.28 million mt, according to the General Administration of Customs of China.

Copper prices have been recently tumbling down following concerns about slowing US economy, credit market problems and subprime mess, along with concerns about global economy’s health. The market also has talks that China may attempt to cool its growth rate in the near term. Federal Reserve announced early this week a housing slump, tighter credit conditions and high oil prices would likely slow U.S. economy’s growth in 2008.

LME copper stocks are continuously increasing and grew 2800 mt to build 185,500 mt on Thursday.

Copper may continue to fall following weak demand from China, rising LME stocks, concerns about the US as well as global economy’s health and credit market woes. Moreover seasonal weakness is also visible in copper though any rate cuts by the Fed and persistent weakness in the US dollar may bring some tentativeness in prices.

TECHNICALS

Copper chart is displaying a downtrend of prices. Candlestick pattern shows firmness. Prices have closed far below short and medium term EMA’s showing weakness. MACD is falling in negative zone showing bearish momentum. RSI is rising in neutral region indicating firmness. Copper may trade volatile during the session.

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