Commodity Blog

Commodity news, technical and fundamental analysis, market data on precious metals, energies, industrial metals, and soft commodities


Copper Flat on Concern Over US-China Trade Delay, Global Supplies

October 30, 2019 at 16:43 by Andrew Moran

Copper futures are flat midweek as reports suggest the first phase of the US-China trade agreement may not be signed in time for next month’s regional conference in Chile. The latest economic data is also making it difficult for investors to effectively gauge the global economy as the US gross domestic product slowed less than the market expected. Later on Wednesday, the Federal Reserve will announce its decision on interest rates, which could impact industrial metal prices.

December copper futures were flat at $2.692 per pound at 16:38 GMT on Wednesday on the Comex division of the New York Mercantile Exchange. Copper prices are already up nearly 1% on the week, lifting their year-to-date gains to just under 2%.

According to various media reports, an interim trade deal between the world’s two largest economies may not be completed in time for the Asia-Pacific Economic Cooperation (APEC) summit in Chile in the middle of November, a US official said. However, the administration source did note that it does not mean the first phase is falling apart but rather the two sides need to iron out the details.

Either way, the potential postponement is causing consternation and skepticism in global financial markets because they have seen this show many times over the last 18 months.

On the data front, third-quarter GDP came in at 1.9%, higher than the market consensus of 1.6%, reports the Bureau of Economic Analysis (BEA). While it is lower than the second-quarter expansion of 2%, it did calm investors fears that the economy is slowing at a faster pace. Q3 growth was driven by household consumption, government spending, and exports. But declining business investment and imports took away from GDP growth.

When it comes to the global copper market, the International Copper Study Group (ICSG) said in its monthly assessment that the international world refined copper market highlighted a deficit of 48,000 tons in July. In June, the gap stood at 36,000 tons.

The group is forecasting that there will be a deficit of 320,000 tons this year, but there will be a surplus of 281,000 tons next year.

Meanwhile, headline stockpiles in London Metal Exchange (LME)-registered warehouses climbed by more than 19,000 tons to 270,325 tons. Inventories have doubled since the beginning of 2019, which shows that global supplies remain sufficient.

In other metal markets, December gold futures rose $6.00, or 0.4%, to $1,496.70 per ounce. December silver futures added $0.04, or 0.23%, to $17.87 per ounce. December platinum futures edged up $2.80, or 0.3%, to $927.90 an ounce. December palladium futures surged $19.10, or 1.09%, to $1,774.20 an ounce.

If you have any questions and comments on the commodities today, use the form below to reply.

Leave a Reply