logo
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

Copper and Aluminum Prices To Drop On Taper, Weaker Chinese Demand

By  +Follow August 19, 2013 7:30AM
Share:
Tickers Mentioned:

Copper futures due for delivery in December dropped 1 percent to $3.33 per-pound to begin the week of trading on Monday, on concerns about weakening demand for the metal through the remainder of 2013.

With a growing certainty across markets that the Federal Reserve will begin its gradual reduction of stimulus spending from $85 billion to $65 billion per month starting in September, analysts have worried that the resulting increase in the strentth of the dollar will send commodity prices downwards. Edward Meir, an analyst at New York’s INTL FCStone was quoted in a report as saying that a September taper would “likely result in a stronger dollar and a rollback in many commodity prices, including base metals.”

Futures have fallen nearly 8 percent so far in 2013, though prices have been on an upward trajectory for first half of August, due to better than expected economic data coming out of China. The country is the world’s largest consumer of copper, and trade figures released on Aug. 8 sent copper prices and related ETFs surging as expectations for a slow-down in construction were shown to be overstated.

The world’s largest mining companies, Rio Tinto Plc. (RIO) and BHP Billiton (BHP) posted significant increases in copper production for the second quarter. This production increase has led to more or less of a consensus that 2013 will see a stockpile surplus that will send prices lower either way. Furthermore, analysts have still been skeptical about the sustainability of the Chinese growth that has propelled copper.

Other base metals were feeling the pressure on Monday as well, with aluminum down 1.3 percent to $1,919.25 per ton on the London Metal Exchange, followed by zinc, nickel, and tin. United Rusal Co., the world’s largest producer of aluminum, said that announced reductions to its aluminum production targets in the wake of second-quarter losses.

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


Liked What You Read? Join Equities.com and Connect With Your Favorite Financial Experts FOR FREE! Members of Equities.com gain access to our leading financial news and content, active social investment community, proprietary research tools including the 2014 Small-Cap Stars, E.V.A. reports and more.

				
				
By  +Follow August 19, 2013 7:30AM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.