A Peak is in for Copper

September 15, 2017 10:00AM CDT

Copper futures are up 17.86 % on the year after breaking through $3/lb and reaching a high of $3.15/lb earlier this month. It appears that prices may have peaked out. Copper is one of the most essential metals with uses ranging from medical purposes to industrial uses, and prices often fluctuate on the basis of supply and demand. When analyzing the demand side, you really want to keep and eye on the two largest economies in the world: China and the United States. China represents 15% of global GDP and the U.S. 24%. Chinese economic data showed the lowest reading for industrial production, which dampens the countries demand outlook. Also, while most likely storm related, U.S. industrial production unexpectedly declined today as well. On the supply side, the two major copper storage facilities are in London and Shanghai, with Shanghai stockpiles falling for the fifth week in a row which is generally a good sign of demand. This is more than offset by the fourth sizable daily increase at the LME. Chart patterns also suggest we may have peaked indicated below. 

 

Dec '17 Copper Daily Chart

Dec '17 Copper Daily Chart

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