Industrial and Base Metals Fundamental Analysis – November 12, 2015 – Forecast – Copper & Palladium

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Published: Nov 11, 2015, 12:23 UTC

Analysis and Recommendations: Copper remained weak after mixed Chinese data this morning left markets hoping for stimulus from the government. Retail

Industrial and Base Metals Fundamental Analysis – November 12, 2015 – Forecast – Copper & Palladium

Analysis and Recommendations:

Copper remained weak after mixed Chinese data this morning left markets hoping for stimulus from the government. Retail sales printed at forecast while industrial production continued to decline weighing on the metals. Copper is trading at 2.211 and Palladium at 597.40. Copper prices extended their losses, hitting a new six-year low on fresh signs of a slowdown in China.

Economic weakness in the world’s biggest copper consumer has led to reduced demand for the metal, which is used in everything from iPhones to refrigerators and pipes. Shares of mining companies have also suffered.

Copper has dropped more than 21 percent this year and is on track for a third annual decline, with industrial commodities falling out of favor as China’s economy slows. “The market’s pricing in a worst-case scenario (on China’s economic slowdown) and that’s why we don’t really see any significant upside to copper prices,” said Daniel Hynes, senior commodity strategist at ANZ Bank.

“While further supply cuts will be supportive, it only does so much to provide some impetus for recovery. You really need demand to show signs of stabilizing and picking up before the market will get comfortable.”

Glencore said last week it expected to cut 455,000 tonnes of copper output by the end of 2017. In September, it suspended copper production at two mines in Africa, removing 400,000 tonnes of cathode from the market.

China is making 6.5 percent a floor or minimum level for annual economic growth in 2016 through 2020, a senior Chinese policymaker said on Monday, adding that the figure would be a base for setting a target for the five-year period.

A stronger US dollar is also weighing on copper and other dollar-priced commodities after robust US employment data on Friday nearly cemented expectations that the Federal Reserve will raise interest rates next month.

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
NZD	RBNZ Gov Wheeler Speaks
USD	API Weekly Crude Oil Stock	6.300M	0.500M	2.800M
AUD	Westpac Consumer Sentiment	3.9%		4.2%
CNY	Fixed Asset Investment (YoY) (Oct)	10.2%	10.2%	10.3%
CNY	Industrial Production (YoY) (Oct)	5.6%	5.8%	5.7%
GBP	BoE Gov Carney Speaks
GBP	Average Earnings Index +Bonus (Sep)	3.0%	3.2%	3.0%
GBP	Claimant Count Change (Oct)	3.3K	1.5K	0.5K
GBP	Unemployment Rate (Sep)	5.3%	5.4%	5.4%
EUR	ECB President Draghi Speaks

Upcoming Economic Events that you should be monitoring:

Thursday, November 12, 2015

Cur.	Event	Actual	Forecast	Previous
NZD	Business NZ PMI (Oct)			55.4
GBP	RICS House Price Balance (Oct)		45%	44%
AUD	Unemployment Rate (Oct)		6.2%	6.2%
EUR	German CPI (MoM) (Oct)		0.0%	0.0%
EUR	Industrial Production (MoM) (Sep)		-0.1%	-0.5%
USD	Initial Jobless Claims		270K	276K
USD	FOMC Member Bullard Speaks
USD	JOLTs Job Openings (Sep)		5.370M	5.370M
USD	Crude Oil Inventories		0.752M	2.847M
USD	FOMC Member Dudley Speaks
USD	Federal Budget Balance (Oct)		-130.0B	91.0B