Copper Fundamental Analysis – November 30, 2015 – Forecast

Analysis and Recommendations:

Copper gained 36 points at 2.085 after news from China helped support metals. The strong US dollar limited gains. Copper prices, which have been among the hardest-hit in this year’s commodity fallout, rallied on Thursday amid reports that China regulators may be looking into short-selling of copper and other metals.

China’s biggest nickel and copper suppliers will meet this week and is considering measures to combat what they see as excessive short-selling of copper, zinc and other metals, and provide support for the market, according to sources cited by Bloomberg News.

In addition, other sources cited said the China Nonferrous Metals Industry Association asked the National Development and Reform Commission has been asked to try to support prices for nickel, aluminum and other metals by buying those commodities.

Another of the catalysts for the fall in copper prices this past week was a large premium price cut set by Codelco, the National Copper Corporation of Chile. “On the face of it, this suggests Codelco expects weaker demand but we think the low premium could actually encourage additional buying, which would be positive for prices,” the report predicted.

China’s largest copper and nickel suppliers plan to meet this week to weigh their response to the rout, according to people with knowledge of the matter. That’s after zinc suppliers pledged last week to reduce output to boost prices. Authorities are also said to be considering state purchases to support the metals as well as possibly intervening to limit futures short selling.

Government buying may have “a positive impact in the immediate aftermath,” Caroline Bain, a commodities economist at Capital Economics in London, said by phone. Though if the market thinks “that they’re just creating higher stocks, that could be negative for prices in the medium term. Everyone now is just looking for signs of output cuts, not stockpiling”.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports.

Today’s economic releases:

 

Upcoming Economic Events that you should be monitoring:

Monday, November 30, 2015

Government Bond Auctions

Date Time Country

Nov 30 11:03 Sweden Holds bond auction

Dec 01 11:30 UK 1.5% 2021 Gilt auction

Dec 02 16:30 Sweden Announces details of Bond on 11 Dec

Dec 03 10:30 Spain Auctions

Dec 03 10:50 France Auctions OATs

Dec 03 11:03 Sweden Holds I/L bond auction

Dec 04 11:03 Sweden Holds I/L bond auction