Industrial and Base Metals Fundamental Analysis – August 7, 2015 – Forecast – Copper, Palladium & More

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Published: Aug 6, 2015, 12:18 UTC

Analysis and Recommendations: Copper bounced off a 6 year low to trade at 2.351 gaining 3 points as Palladium rebounded $4.40 as traders bought the cheap

Industrial and Base Metals Fundamental Analysis – August 7, 2015 – Forecast – Copper, Palladium & More

Analysis and Recommendations:

Copper bounced off a 6 year low to trade at 2.351 gaining 3 points as Palladium rebounded $4.40 as traders bought the cheap commodity. The copper price is having a torrid 2015 as the economic news

Copper’s latest drop follows a reading of Chinese manufacturing activity that shocked the market. The copper price is down 17% so far this year.

The Caixin manufacturing purchasing managers’ index (PMI) for July fell by more than expected to a two year low of 47.8.

A reading below 50 indicates a contraction and the Caixin index has shown shrinking output, orders and prices for five straight months. The official government-compiled manufacturing PMI, published on Saturday, was much healthier than Caixin, but also edged down from 50.2 to 50.0.

Some analysts noted that disruptions to the operation of copper mines in Zambia and Chile are likely to dent supply. Barclays estimates that July’s announcements, which include dry weather in Papua New Guinea and strikes in Chile, add up to roughly 232,000 metric tons of lost copper production.

Morgan Stanley analysts said problems at copper operations have already removed 500,000 metric tons of supply in 2015.

Earlier in the year, copper prices had rallied after a spate of disruptions at various copper mines threatened to reduce global supply. Flash-floods in Chile, a pay dispute in Indonesia and an electrical problem in Australia prompted copper traders, who had been net-bearish on prices for nearly six months, to turn net-bullish on copper in early March.

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:

Cur.	Event	Actual	Forecast	Previous
AUD	Employment Change (Jul)	38.5K	10.0K	7.0K
AUD	Unemployment Rate (Jul)	6.3%	6.0%	6.1%
EUR	German Factory Orders (MoM) (Jun)	2.0%	0.2%	-0.3%
GBP	Halifax House Price Index (YoY) (Jul)	7.9%	8.2%	9.6%
GBP	Industrial Production (MoM) (Jun)	-0.4%	0.1%	0.3%
GBP	Manufacturing Production (MoM)	0.2%	0.2%	-0.6%
GBP	BoE Inflation Report
GBP	BoE QE Total (Aug)	375B	375B	375B
GBP	Interest Rate Decision (Aug)	0.50%	0.50%	0.50%
GBP	BoE MPC Meeting Minutes

Upcoming Economic Events that you should be monitoring:

Friday, August 7, 2015

Cur.	Event	Actual	Forecast	Previous
JPY	BoJ Press Conference
USD	Nonfarm Payrolls (Jul)		223K	223K
USD	Unemployment Rate (Jul)		5.3%	5.3%
CAD	Employment Change (Jul)		5.0K	-6.4K
CAD	Ivey PMI (Jul)		52.0	55.9