Industrial and Base Metals Fundamental Analysis – November 11, 2015 – Forecast – Copper & Palladium

Analysis and Recommendations:

Copper continued to fall without any assistance after Chinese trade data showed a lower demand for copper and inflation data this morning printed well below expectations. Copper is trading at a bottom of 2.216. Palladium added $14.82 recovering as Volkswagen DeiselGate moved from the headlines. Palladium is trading at 611.77.

The surplus on the Chinese balance of trade expanded at a lesser pace than anticipated in October, an official government report revealed. A figure of USD 61.64 billion was reported compared to expectations pointing to a USD 64.75 billion surplus. At the same time, Chinese exports were reported to have shrunk at an annualized rate of 6.9% in October, or considerably more than what the median estimate by analysts showed. October has been the fourth consecutive month, during which annual exports fell. The nation’s imports shrank for a 12th straight month in October, going down 18.8% year-on-year, which added to concerns over the strength of domestic demand and overall economic recovery. The median forecast by experts pointed to a 16.0% decline in October imports.

Copper prices skidded to a six-year low and mining shares tumbled on Monday after China’s import data showed declining demand from the world’s top buyer of the industrial metal.

China’s imports of copper and copper products for the first 10 months of 2015 fell 4.2%, to 3.82 millions tons, from the year-earlier period, the country’s General Administration of Customs said Monday. Imports are on track for their first year-on-year drop since 2013.

“This is further evidence of that slowing in China and that their demand for copper is going to continue to decline,” said Paul Nolte, a portfolio manager with Kingsview Asset Management in Chicago. “Obviously, declining demand is going to keep the pressure on copper prices.”

China accounts for about 40% of global copper demand and the import data highlighted long-running concerns that the country’s economic slowdown would translate into lower copper imports. Recent reports showed that Chinese factory activity continues to contract and construction starts lag behind last year’s pace.

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:

Wednesday, November 11, 2015

Government Bond Auctions

Date Time Country

Nov 09 13:00 Norway Details bond auction on 11 Nov

Nov 09 16:30 Italy Announces details of BTPs/CCTeu on 12 Nov

Nov 09 19:00 US Holds 3-year note auction

Nov 10 11:00 Holland Eur 2.0-3.0bn 0% Apr 2018 DSL

Nov 10 11:30 UK 0.125% 2058 I/L Gilt auction

Nov 10 19:00 US Holds 10-year note auction

Nov 11 11:03 Sweden Holds bond auction

Nov 11 11:30 Germany Eur 3bn 0.25% Oct 2020 Bobl

Nov 11 12:15 Norway Holds bond auction

Nov 12 11:10 Italy Auctions BTPs/CCTeus

Nov 12 11:30 UK 4.25% 2039 Gilt auction

Nov 12 19:00 US Holds 30-year bond auction

Nov 18 11:30 Germany New Eur 5bn Dec 2017 Schatz

Nov 18 10:30 UK 2% 2025 Gilt auction

Nov 18 10:30 Portugal Eur 1-1.25bn; bond auction

Nov 18 15:30 Sweden Announces details of Bond on 25 Nov

Nov 18 N/A Holland Announces details of Bond on 24 Nov

Nov 19 09:30 Spain Auctions Bonos/Obligaciones

Nov 19 10:50 France Auctions BTANs

Nov 19 11:50 France Auctions OATi

Nov 19 N/A US Holds 10-year TIPS auction

Nov 20 16:30 Italy Announces details of CTZ/BTPei on 25 Nov