RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Metals

A Peak is in for Copper

Posted 09/15/2017 10:00AM CT | Phillip Streible

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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Phillip Streible

Senior Market Strategist
Early in his career Phillip began trading his own account as a screen trader focusing on the metals, grains and stock indices. He then became a Series 7 licensed financial consultant with A.G. Edwards. Later, he expanded his trading experience into a Series 3 licensed commodity broker with Investment Analysis Group. Most recently he was a senior market strategist at MF Global before joining RJO Futures in October 2011 as a senior commodities broker. As a senior commodities broker his goal is to show clients how to anticipate, recognize and react to bull and bear market conditions through the use of technical analysis techniques that help them to define risk.
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