Industrial and Base Metals Fundamental Analysis – November 19, 2015 – Forecast – Copper & Palladium

Analysis and Recommendations:

Copper continued its decent giving up 9 points today to trade at 2.0996 while Palladium tumbled by almost $4 to reach 542.58. Short positions in the metal increased 39 percent, the most since January 2014, according to U.S. Commodity Futures Trading Commission data released Monday. A rally for Chinese stocks fizzled Tuesday after technology and small-company shares plunged, as the Asian nation heads for the slowest economic growth in 25 years. The metal has lost 25 percent this year.

Chile’s Codelco, the biggest copper producer, plans to cut the premium that purchasers must pay on sales to China by the most since 2009 to try to boost shipments to the largest consumer and counter slowing demand, according to two buyers.

The copper market in 2015 will have a production surplus of 78,000 metric tons, even as mining companies cut output

The big driver, at least initially, of these lower prices was the slowdown in China. As a growing industrialized nation with an enormous geographic scope and a breakneck growth rate, China became a large consumer of raw materials and commodities. A cheap dollar over the past six years only accelerated these themes, as it made the relative cost of these commodities cheaper on a per-unit basis, all factors held equal.

But Chinese growth began to slow heavily from the 10% growth rates seen for much of the decade leading into 2014, down to 8%; followed by a 7.5% growth target in March of 2014, and then a target of ‘around 7%’ in March of 2015, and most recently, a 6.5% target set for 2016 to 2020. This slowing of growth has had a dramatic impact on Commodity prices

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:

Thursday, November 19, 2015

Government Bond Auctions

Date Time Country

Nov 19 10:30 Spain 0.25% Apr 2018 Bono, 1.15% Jul 2020 Bono, 5.4% Jan 2023

Nov 19 10:50 France Eur 7-8bn; 4.25% Oct 2018 OAT, 0.25% Nov 2020 OAT, 2.25%

Nov 19 11:50 France Eur 1-1.5bn; 0.25% Jul 2024, 1.85% Jul 2027, 3.15% Jul 2032

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

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

Nov 23 12:00 Belgium Auctions OLOs

Nov 23 N/A US Holds 2-year note auction

Nov 24 17:30 Italy Announces details of BTPs/CCTeu on 27 Nov

Nov 24 N/A Holland Eur 1.0-2.0bn 0.25% Jul 2025 DSL

Nov 24 N/A US Holds 5-year note auction

Nov 25 11:03 Sweden Holds bond auction

Nov 25 11:10 Italy Auctions CTZ/BTPei

Nov 25 11:30 Germany Eur 3bn 1.0% Aug 2025 Bund

Nov 25 N/A US Holds 2-year FRN auction

Nov 25 N/A US Holds 7-year note auction

Nov 26 11:03 Sweden Holds bond auction

Nov 27 11:03 Sweden Holds bond auction

Nov 27 11:10 Italy Auctions BTPs/CCTeus