Reuters reports copper hit its lowest in nearly a month on Monday as investors, already mired in worries over Europe’s debt, digested news that US plans to combat debt are in disarray and took in warnings from China about gloomy global growth prospects.
While US politicians’ inability to reach consensus on tackling the country’s debt problems was greeted with little surprise and the Europe crisis has been foremost in investors’ minds for months, the statements by China’s Vice Premier overnight really knocked sentiment. Wang Qishan said that a long-term global recession is certain to happen and China must focus on domestic problems. China is the world’s top copper consumer, taking in about 40% of the world’s copper versus Europe that accounts for 19% of demand.
In early morning trade Monday in New York December copper declined 2.9% to $3.30 a pound. Copper has declined 22% to $7,525 a metric ton on the London Metal Exchange this year, heading for the first annual drop since 2008.
Reuters reports with so little to cheer on the macro side, investors took some comfort from data showing copper stocks, seen to signal demand strength, continued their relentless slide in LME warehouses.
On Friday Bloomberg reported 11 of 23 copper traders surveyed expect the metal to decline, the second consecutive week that their outlook worsened and the highest proportion since Sept. 23. The last time so many were bearish, prices dropped 4.6% the following week.
4 Comments
Guest666
I certainly wouldn’t be investing in copper stocks right now. Especially the juniors. The juniors are going to get absolutely slaughtered over the next 12 months.
Xc James
But for a copper hunter,the next year will be the best time to merge copper mines.
George
Certainly we are running into a recession. The question is how much time will it last?
Thumper
Running into? Uh, hello, earth to George. Are you the type who thinks 10% unemployment in the USA is caused by lazy people who won’t work? funny that there has been unemployment as low as 2% in the past, but suddenly, 8% won’t work? Ya think maybe they work when they have the opportunity to work, and now, because we are already in recession, they don’t have opportunity to work? Please find your brains, please.