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Copper Trades Under $3 as Metal Stocks Initiate Roller Coaster

September 19, 2017 at 16:59 by Andrew Moran

Copper futures are trading under $3 as the industrial metal has now petered out. The next big discussion for the red metal will be London Metal Exchange (LME) copper stocks, which have experienced a near 50% jump over the last week. Copper prices are trading relatively flat as traders begin to comb through the details.

December copper futures rose $0.0025, or 0.08%, to $2.971 per pound at 16:38 GMT on Tuesday. Copper prices have had a dramatic September, reaching their highest levels in three years. The momentum has stalled and now the technicals will dominate the industry.

Year-to-date, copper prices have risen 17%.

According to Reuters, LME inventory increased 46% to 304,350 tonnes over the last week; and live on-warrant inventory climbed 87% to 217,500 tonnes. The LME copper stocks will begin a roller coaster ride that will have an immense impact on prices for the remainder of the year.

Last week, the biggest inflows were focused on Rotterdam (37,875 tonnes), South Korea (34,927 tonnes), Malaysia (15,800 tonnes), and Taiwan (11,800 tonnes).

The newswire is further reporting that China’s top copper smelters are attempting to establish a higher floor for treatment and refining charges in the fourth quarter of 2017, prior to the upcoming supply contracts with miners early next year. Sources are pegging the number at $86 to $88 a tonne.

$86 is where the spot market is thereabouts. I [would] bet on lower numbers going forward as there currently are two major Chinese smelters standing idle, which incidentally usually are very active in the spot market.

Industry analysts say that the market will try to return to normalcy for the rest of September. Many experts agreed that copper was overbought throughout the summer. For the most part, investors are suggesting that the copper market has peaked and that it is time to take the profits now before the prices tumbles even further.

Other metals are mixed on Tuesday. December gold futures slid $1.60, or 0.12%, to $1,309.20 per ounce. December silver futures rose $0.09, or 0.55%, to $17.25 an ounce. October platinum futures fell $12.90, or 1.34%, to $948.60 an ounce. October palladium futures tumbled $19.50, or 2.10%, to $910.35.

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

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