Weekly copper market review 12/14/2020.Support us by consulting our free magazines with color stock charts and weather maps on our commodity-market-review.com website.
TECHNICAL ANALYSIS OF COPPER
Last week, COMEX copper futures closed higher at $3.528 per pound.
Speculative trading is pushing copper prices up, with net positions of COT commitments of traders exceeding 80K for the 1st time, they are on historical highs.
Copper stocks are historically low at 300937 MT and are about to fall below the 300 mark which represents less than 5 days of world consumption.
China, the main consumer of copper, is in a phase of accelerated growth, with a recovery in the electronics and automotive export sector which has stimulated demand for industrial metals.
In November, refined copper imports fell for the second consecutive time, down 9.2% compared to October. Imports of copper concentrates increased by 8.3% in November. China's exports grew by 21.1% in November, far exceeding the expected 12%.
Internationally, the ECB increased its asset buyback program by 500 billion, the US support plan is still slow to come, and a brexit no-deal is increasingly likely. The FDA in turn is approving the use of Pfizer's vaccine, and vaccination begins this week in the US. In terms of the pandemic update, we have just surpassed 72 million cases worldwide, with more than 1.607 million deaths. The U.S. is still the most affected country, and will approach and surpass the 300,000 mark in deaths and more than 16 million cases.
The Dollar consolidated last week as the DXY closed higher at 90.976, with the long-term trend still bearish.
ECONOMIC RESULTS
- Last week, Chinese exports grew by 21.1% in November and imports declined by 4.5%. Euro-zone GDP was up 12.5% in Q3, the ZEW Economic Sentiment Index surged to 54.4 from an expected 37.5. US unemployment registrations disappointed at 853K for 725K expected.
- On Monday, industrial production in the Euro zone came out at +2.1% compared to +0.1% the previous month.
- On Tuesday, industrial production was +7.0% compared to +6.9% in the previous month. The Chinese unemployment rate was 5.2%. US industrial production was 0.4% compared to 0.9% the previous month, and the New York FED manufacturing index was down 4.90 compared to 6.30 in October.
- Wednesday, Euro-zone Manufacturing PMI, U.S. Retail Sales and U.S. Manufacturing PMI.
- Thursday, Euro-zone inflation, U.S. building permits, U.S. unemployment registrations, and Philadelphia FED manufacturing index.
CERTIFIED COPPER STOCKS
- London Stock Exchange copper stocks are down to 146325 MT from last week's 149675 MT.
- Copper stocks on the Shanghai Stock Exchange were down to 82092 MT from 97783 MT the previous week.
- Copper stocks on the New York Stock Exchange were down to 72520 MT for 73233 the previous week.
- Total copper stocks were down to 300937 MT compared to 320691 MT the previous week. Total copper stocks are below the five-year average.
THE DOLLAR
The DXY index representing the Dollar against a basket of foreign currencies closed last week up at 90.976, although the long-term trend is still bearish. The DXY consolidated last week. The ECB increased its asset repurchase program by $500 billion, and, the U.S. support plan is still lagging behind, still failing to agree on emergency aid of just over $900 billion. The dollar has also strengthened against the pound sterling, on an increasingly likely no-deal, as the disagreements seem so deep.
A low dollar is generally favorable to dollar-denominated commodity markets.
COMMITMENTS OF TRADERS
The weekly COT (Commitments of Traders) report of the Commodity Futures Trading Commission (CFTC) shows all the positions opened by all market participants. The COT report is published on Friday, and reflects the open positions on Tuesday of the same week. It shows the position of commercial traders (producers, commodity buyers, ...) but also non-commercial (speculators).
The net positions of speculators on the futures markets are particularly interesting to observe.
The net speculative position on the copper futures markets is up this week to 80.039 K instead of 79.856 K.
