Bulletins

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MonthlyCopperBulletin-Oct.

  MARKET COMMENTARY 

Copper prices are widely used as a gauge of economic health, which has been hurt by the prolonged trade war between the United States and China has hurt global growth outlook and demand for the red metal, as well as volatilities caused by the lengthy Brexit negotiations.

In early October, the U.S. dollar index was at its highest (99.667) since May 2017, making metals priced in the U.S. dollar including those on the LME more expensive for users of other currencies. The LME copper fell to $5588, its lowest since May 2017, on first day of October due to a stronger dollar, but trading was thin as traders in top consumer China went on a long holiday. The United States on 2nd October said it would slap 10% tariffs on European-made Airbus planes and 25% duties on French wine, Scotch and Irish whiskies, and cheese from across the continent as punishment for illegal EU aircraft subsidies. The dollar start to eased on Thursday, sliding to fresh one-week lows against the euro and yen as investor anxiety deepened over fresh signs of slowing U.S. economic growth and a broadening of global trade friction. The discount for cash copper versus three-month metal on the LME rose to $35 first week of October, the most since August last year, pointing to plentiful availability.

London copper advanced after 9th October following U.S. President Donald Trump described trade talks with China as "very good", raising hopes of breakthrough in the tariff war between the world's two biggest economies. But gains were limited as the markets remained cautious about prospects of a deal between the two biggest global economies until the second half of October.  London copper rose on  $5941.5 (the highest since 16th Sept.) 29th October because of worries of a supply disruption in Chile, the world's biggest producer, lent some support. But LME copper gave back soma gains because of weak China data and anxious about China-US trade deal.London copper has been closed October with gains %1.65.

 



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MonthlyCopperBulletin-May

MARKET COMMENTARY

Copper prices dropped on May, pressured by concerns over the outlook for the global economy and metals demand as Washington and Beijing struggled to salvage a deal to end a bitter trade war. The trade conflict between the world's top two economies escalated on first wee on May with the United States hiking tariffs on $200 billion worth of Chinese goods after President Donald Trump said Beijing "broke the deal" by reneging on earlier commitments made during months of negotiations. Beijing has called on Washington to show "sincerity" if it is to hold meaningful trade talks, after the United States put China's Huawei Technologies Co Ltd, the world's biggest telecoms equipment maker, on a trade blacklist.

Investors remained cautious after weaker-than-expected Chinese retail sales and industrial output data. The figures for April largely pointed to a loss of momentum, after surprisingly upbeat March readings had raised hopes the economy was slowly getting back onto a firmer footing and would require less policy support.

The last week of May London copper prices find support as a new blockade at MMG Ltd's Las Bambas mine in Peru lent support to prices, although gains were capped by ongoing U.S.-China trade tensions. On 31th of May LME coper edged down to 5 months low to .$5812.5. 3m LME copper closed May with a loss of 9.5%.

London copper made weak start to June because of the negative datas. Growth in U.S. manufacturing activity slowed in May to its weakest pace in over two years as factory managers raised concerns about a trade war between the United States and China, a national survey showed. Manufacturing activity in the euro zone contracted for a fourth month in May and at a faster pace, as the U.S.-China trade war, slumping automotive demand, Brexit and wider geopolitical uncertainty took their toll, a survey showed. LME copper edged down to $5740 on 7th of June because of trade dispute, signs of slowing economic growth and dissappointing US jobsa data weakened the demand outlooks for metals.

The direction of the wind changed with strike and Fed definitions. Copper prices rose last week supported by supply disruptions as a labour strike halved output at one of the world's largest mines in Chile and Glencore's Zambian smelter shut for refurbishmentThe Codelco-owned Chuquicamata mine, which produced 320,744 tonnes of copper in 2018, headed for its fourth day of a stoppage after a failed labour deal a week before. In Zambia, Mopani Copper Mines has shut down its Mufulira smelter for major refurbishment, the Glencore-owned company said late on 17th June.

The U.S. Fed on Wednesday left interest rates unchanged as widely expected, but said the case for lower rates was building, suggesting it could ease monetary policy as early as next month amid rising trade tensions and concerns about weak inflation.The dollar index eased against a basket of six major currencies. A weaker USD offset some concerns about the upcoming U.S.-China trade talks. Reports of the call between the two presidents suggested that their meeting at the G20 would only cover strategic issues, raising concerns that an agreement was still some way off. After tested $6027 level last week, LME copper start new week with $5915-6035 band.



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Monthly Copper Bulletin-February 2019

  MARKET COMMENTARY 

Copper moved steadily higher during February, getting to an eight-month high towards month-end. The metal has been a primary beneficiary of growing optimism surrounding the US/Chinese trade talks, but the fact that LME inventories have also been shrinking of late has also helped the rally. CRU notes that aggregate exchange inventories (COMEX, LME and SHFE) still remain at four-year lows. Meanwhile, refined copper and concentrate imports into China are running at a brisk pace.

The last days of March, we saw the positive impact of the US/Chinese trade talks will start to wane as many markets have largely discounted a deal by already moving higher. Market focus should revert back to the deteriorating macro situation where in copper’s case, the situation in

China will be of primary interest. London copper and most other base metals rose on 21.03.2019, backed by a softer dollar after the U.S. Federal Reserve abandoned plans for a further rate rise this year, and by a lack of near-term supply. LME copper edged up to $6555.5 having touched a near nine months high.  But  most base metals fell on this week as investors worried about the prospect of a recession in the United States, the world's biggest economy. Concerns of weaker economic growth are likely to keep downward pressure on commodities for the time being. Three-month LME copper is trading on $6360 now.

 



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Monthly Copper Bulletin-January 2019

   MARKET COMMENTARY 

Copper traded roughly within a $6000/ton range between early December to mid-January, with prices fluctuating between $5725–$6199 in January. No doubt, the more optimistic tone generated by the recently concluded US/Chinese trade talks have helped stabilize copper of late, although growing macro weakness in China will likely keep a more significant rally in check. The latest Chinese PMI numbers (both the official and private readings)have dipped into contraction territory for the first time in years. These are correlate quite significantly with copper prices, perhaps better than almost any other indicator we have seen.

Meanwhile, the latest ICSG numbers has the global refined copper market in a 595,000-ton deficit through September of last year compared with a 226,000-ton-deficit in the same period a year earlier. The ICSG’s deficit reading to be excessively high and expect the 2018 number to fall from where the ICSG has it once the year is complete.

In other ke developments, Chile's copper production recovered nicely in 2018, increasing 6% year-to-date through November. Given that China has been reducing its scrap imports considerably for much of the past two years, we suspect that Chilean refined units will find a ready home going into China as substitute material for scrap and so the increase in Chilean production should readily be absorbed China imported 4.87 million tons of unwrought copper in the first eleven months of 2018, an increase of 14.9% from a year earlier; ores and conc imports reached 18.25 million year-to-date through November, up 16.4% year-on-year.

The ShFE was closed between 04.02.2019-08.02.2019 session for China's Lunar New Year holiday, re-opening today (on Feb. 11). LME Copper prices were supported by easing U.S.-China trade tension. The first week of Feb copper reached $6,289.5 a tonne although concerns over slowing factory activity in China limited gains (while China was closed). The trade volume was very low. LME closed down 0.83 %at $6,201.5 a tonne on Friday after U.S. President Donald Trump said he did not plan to meet China's Xi Jinping before a March 1 deadline for the two countries to achieve a trade deal. LME copper closed first week of February with 1% weekly gain.

Today Chinese trader turn back and copper edged down 1.02 % on profit taking. There are no ECB and FED meetings on February. We have been waiting March 1 deadline for the two countries (China and US) to achieve a trade deal. If China and the US agree on March 1, we expect a bullish trend on copper.

 



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Monthly Copper Bulletin-MARCH18

MARKET COMMENTARY 

Copper ended lower in March for a third month in a row. Copper was trading between $6532-$7064 before ending at $6740.5. For the first quaret of 2018, LME copper edged down 7 percent, not exactly a good start to the year. Several reasons are behind the decline, the most prominent being trade war anxitous between US and China. Both actions sent a chill through ferrous and nonferrous complexes, as investors became rightly concerned that the world’s two most powerful economies could get embroiled in an escalating trade war. A steady increase in copper exchange stocks also weighed on prices; combined stocks at both LME and SHFE were up roughly 18% this past month and have almost doubled vs. this time last year.

The refined copper market ended 2017 with a deficit of about 163,000 tons, this according to the latest ICSG report, up from the group's original projection of 150,000 tons. The ICSG expects the 2018 deficit to shrink to 105.000 tons, not a particularly high number and one that could easily flip into a surplus if Chinese demand starts to flag. So far in 2018, there is not much evidence of that. On the trade side, China imported a little over 544.000 tons of refined copper in the first two months of 2018 — up 6.3 percent year-on-year.

For the year as a whole, Antaike sees Chinese refined consumption rising by 3.3 percent to 11.1 million tons, while domestic refined output is expected to hit 8.35 million tons, a 4.3percent y-o-y increase. This would mean that China would still need to import roughly 3 mln tons of copper, down 7.5 percent from 2017 levels (this according to Antaike), but a sizable number nonetheless.

 



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Monthly Copper Bulletin-NOVEMBER17

MARKET COMMENTARY

The market was remained strong with increasingly confident about its place in the electric car movement, with producers and traders at the London Metal Exchange Week annual gathering speaking positively about the growth in demand expected from this sector. 

Dollar sagged on early November, knocked away from eight-month highs versus the yen, as Treasury yields slipped on uncertainty over whether the Republicans can pass their tax bill in a timely manner.

 

The supply side,The Indonesian unit of Freeport-McMoRan Inc  has temporarily shut the main supply route to its Papua mine after a shooting incident, a spokesman said, amid escalating tensions between security forces and an armed rebel group in the area in mid of November. Global miner Rio Tinto Plc restarted the smelter at its large Kennecott mine in the United States on 20th of November after a nearly six-week outage but force majeure. Workers for the two largest unions at Southern Copper Corp in Peru said on 22th of November hey had started an indefinite strike, demanding a fair share of profits, while the company said the stoppage had not affected operations. The supply desruptions supported to copper. LME copper edged up $7024 on 27th of November.

China's economy cooled further last month, with industrial output, fixed-asset investment and retail sales missing expectations.  The last week of November copper prices fell as concerns over demand in top consumer China and declining oil prices push investors to sell. LME copper price in November fell by 1.3 percent.

 



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Monthly Copper Bulletin-JULY17

MARKET COMMENTARY 

Copper and other metals have been supported by relief that China's economy is proving more resilient than expected, partly due to easier liquidity ahead of China's national congress later this year which has fed metals demand. A pick-up in the industrial sector helped China post better-than-expected second quarter economic growth as finance and real estate expansions slowed to multi-year lows. China's exports and imports grew much less than expected in July, raising concerns over whether global demand is starting to cool even as major Western central banks consider scaling back years of massive stimulus support. China's copper imports rose 8 percent in July from last year as the availability of credit improved, even as concerns lingered about manufacturing activity.

The Federal Reserve kept interest rates unchanged on 27th July and said it expected to start winding down its massive holdings of bonds "relatively soon" in a sign of confidence in the U.S. economy. A gauge of U.S. factory activity slid from a near three-year high in July amid a slowdown in new orders and consumer spending barely rose in the prior month, setting the stage for a moderate economic expansion in the third quarter. Federal Reserve policymakers appeared increasingly wary about recent weak inflation and some called for halting interest rate hikes until it was clear the trend was transitory, according to the minutes of the U.S. central bank's last policy meeting.

The dollar dipped, making dollar priced metals cheaper for non-U.S. investors, while world stocks, seen as a proxy for growth, breached new records on better-than-expected company earnings and strong U.S. jobs data. North Korea were the right response to a series of missile tests, but dialogue was vital to resolve a complex and sensitive issue, now at a "critical juncture". North Korea said it is "carefully examining" plans for a missile strike on the U.S. Pacific territory of Guam, just hours after U.S. President Donald Trump told the North that any threat to the United States would be met with "fire and fury”.  The dollar firmed this week after North Korea's leader signalled that he would delay plans to fire a missile near Guam, further easing tensions and prompting investors to move back into riskier assets. Also

Copper prices were at their highest since 2014 as rises across most industrial metals triggered pre-set buy orders and a wave of speculative buying and supported by a weaker dollar and increasingly upbeat views about China's economic growth and metals demand. Benchmark copper was 2.5 percent higher at $6,580 on 17th August, its highest since November 2014. But the gains came despite data showing China's home price growth slowed in July, reinforcing expectations that property price growth may stagnate over the course of the year, a negative for industrial commodities. Also metals were set in downward motion on 17th August by weaker than expected U.S. industrial production, which rose only 0.2 percent in July.



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Monthly Copper Bulletin-JUNE17

MARKET COMMENTARY

Industrial metals markets will be watching manufacturing, investment, property market and loans data for clues on the strength of its copper demand over coming months. China accounts for nearly half of global copper demand, estimated at around 23 million tonnes this year. Activity in China's manufacturing sector in June quickened from the previous month, in a reassuring sign the world's second-biggest economy kept up a reasonable pace of growth after a solid first quarter.

Federal Reserve policymakers were increasingly split on the outlook for inflation and how it might affect the future pace of interest rate rises, according to the minutes of the Fed's last policy meeting on June 13-14 released. The U.S. economy continues to churn out jobs and grow at a steady pace, with investment and consumer confidence both healthy and only moderate signs of risk in financial markets, the U.S. Federal Reserve said. London copper inched up on Monday after a solid U.S. jobs report buoyed hopes that an economic recovery is taking root in the world's top economy, spurring appetite for riskier assets. The data followed expansion in China's manufacturing sector in June, which also underpinned investor demand for metals. U.S. stocks and bonds rallied July 14, with the S&P 500 Index reaching a new intraday high, as U.S. inflation data came in short of Federal Reserve expectations, spotlighting concerns of some central bankers about additional interest rate hikes.

The dollar fell to a more than one-week low against a basket of major currencies, after U.S. President Donald Trump's eldest son released an email chain citing Russian support for his father before last year's U.S. election. A weaker dollar typically draws interest for U.S. dollar-denominated commodities such as copper from investors outside the United States using other currencies. The U.S. dollar hit a 10-month low against a basket of currencies, making dollar-denominated commodities cheaper for holders of other currencies and potentially boosting demand.

Workers at the Zaldivar copper mine in Chile, owned by Antofagasta and Barrick Gold Corp, voted to approve a strike on Monday after talks with the company failed. The nearby Centinela mine is also in negotiations over strike action. Together the two mines produced 340,000 tonnes of copper in 2016.

China's economy grew 6.9 percent in the second quarter from a year earlier, faster than expected and in line with the first quarter's growth. Analysts polled by Reuters had expected the economy to expand 6.8 percent in the April-June quarter.

While oil advanced last week, prices in New York are still below $50 a barrel on concerns expanded global supplies will offset output curbs by the Organization of Petroleum Exporting Countries and its allies. The group’s output climbed last month to the highest this year as members exempt from the deal -- Nigeria and Libya -- pumped more and others slipped in delivering their pledged curbs.

Workers voted to approve a strike at a mine in Chile, following industrial disputes in Indonesia and at the world's biggest copper mine, also in Chile, earlier in the year, that whittled into copper supply. Copper prices hit 4-1/2-month highs on July 17 as better-than-expected economic data from top consumer China and a weak dollar helped reinforce expectations of strong demand. Benchmark copper on the London Metal Exchange ended up 1.2 percent at $6.003 a tonne from an earlier $6,022.5, its highest since March 2.



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Monthly Copper Bulletin-MAY17

MARKET COMMENTARY 

Moody's downgraded China's credit rating for the first time in nearly 30 years, saying it expects the financial strength of the economy to erode in coming years as growth slows and debt continues to rise. Much of the price weakness in copper is because of the tighter credit situation in China, when this reverses the Chinese speculative community will look at copper in a more positive light.

Miners at Grasberg, the world's second-largest copper mine by production, opted to strike for a month at the beginning of May, but this has been extended. Freeport is currently operating under a temporary export permit to ship copper concentrates out of Grasberg, which is in the Indonesian territory of West Papua, after the government lifted an export ban in April. BHP declared force majeure at the mine in early February at the start of a labour strike that lasted 43 days and cost the world's biggest mining house an estimated $1 billion. It has lifted a declaration of force majeure at its Escondida copper mine in Chile, more than a month after a costly strike came to an end.

China's economy is likely to have remained on a stable footing in May, buoyed by solid gains in trade and investment as economic ties with the United States take a positive turn and infrastructure spending cushions domestic growth. U.S. services sector activity slowed in May as new orders tumbled, but a jump in employment to a near two-year high pointed to sustained labor market strength despite a deceleration in job growth last month. The British pound dropped as the U.K.’s ruling Conservative Party lost its parliamentary majority, plunging the country into uncertainty just days before Brexit negotiations were due to start. Sterling dropped the most in eight months as the election intended to strengthen Prime Minister Theresa May’s hand in negotiations with the European Union instead left her battling to survive.

Copper stocks in LME warehouses fell 7,875 tonnes on June 7 to 286,350 tonnes, continuing their retreat from early May's seven-month high. They have declined almost 20 percent from that peak. China reported stronger-than-anticipated exports and imports for May despite falling commodity prices, suggesting the economy is holding up better than expected despite rising lending rates and a cooling property market. Three-month copper on the London Metal Exchange had risen 0.2 percent to $5,832 a tonne on June 9. Copper, used in power and construction, made its biggest weekly gains since mid-March last week, ending about 2.5 percent higher.

The Federal Reserve raised interest rates on June 14 for the second time in three months and said it would begin cutting its holdings of bonds and other securities this year, signaling its confidence in a growing U.S. economy and strengthening job market. U.S. stocks fell for the fourth time in five days as selling in technology shares worsened, sending the Nasdaq indexes lower by more than 0.6 percent. The dollar advanced with Treasury yields as traders digested the more hawkish tone struck by the Federal Reserve.

London copper dipped to its lowest in last week on Thursday after the U.S. Federal Reserve raised rates for the second time this year, boosting financing costs for industry. But solid Chinese economic data limited losses and resulted in higher steel prices that pushed up zinc and lifted nickel from a one-year low. Crude prices fell sharply after a large build in U.S. gasoline inventories and a projected rise in non-OPEC production. Lower energy prices tend to pressure metals because they deter investors from buying into commodity basket funds and allow smelters to produce at lower prices.



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Monthly Copper Bulletin-APRIL17

MARKET COMMENTARY  

The U.S. Federal Reserve kept interest rates unchanged in April meeting and downplayed weak first-quarter economic growth while emphasising the strength of the labour market, in a sign it was still on track for two more rate rises this year. A bounce in the dollar after the Federal Reserve played down any threats to this year's planned interest rate hikes, solidifying expectations of another move in June, pressured commodities across the board, meanwhile. Copper fell to $5.542 extending losses after its biggest one-day drop in 20 months to head towards its April lows, as rising inventories, worries over cooling demand and a bounce in the dollar all weighed.

China's factory sector lost momentum in April, with growth slowing to its weakest pace in seven months as domestic and export demand faltered and commodity prices fell. Growth in China's services sector cooled to its slowest in almost a year in April as fears of slower economic growth dented business confidence, even as cost pressures eased. Concerns that heat is evaporating from China's economy have added to downside pressure on metals.  China's April copper imports fell 30 percent month on month to 300,000 tonnes and were down by a third from a year ago as a subdued outlook for industrial activity weighed on demand. Copper slid to a four-month low (at $5.463) after data showed a steep drop in imports into China, the world's biggest consumer, feeding pessimism over demand following hefty inflows into London Metal Exchange inventories.

Capping copper's gains, the dollar rose versus a currency basket, with another U.S. rate hike in June now almost certain. A stronger dollar makes dollar-priced copper more expensive for holders of other currencies. Stock markets were put on edge by U.S President Donald Trump's abrupt dismissal of FBI Director James Comey and rising tensions over North Korea's nuclear programme. The euro firmed, European stocks and U.S. stock futures hit a record high after centrist Emmanuel Macron comfortably won the French presidential election.

Support for base metals also came from a weaker U.S. currency, which makes dollar-denominated metals cheaper for non-U.S. companies, potentially boosting demand. Crude oil rose above $52 a barrel for the first time since April after Saudi Arabia and Russia said that OPEC-led output cuts need to be extended for a further nine months until March 2018.

London copper prices were steady $5.560 - $5.640 band in this week, stymied by expectations of slowing growth in the economy of top metals consumer China. After clocking 6.9 percent in the first quarter thanks to spending on infrastructure and a property boom that policymakers want to rein in, analysts surveyed by Reuters reckon 2017 economic growth will just about make Beijing's target of 6.5 percent as it slows over the rest of the year. 



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TCMB Currencies (05.12.2019) USD: 5,7463 - EUR: 6,3643 - GBP: 7,5021 Fixing Currencies (05.12.2019) USD: 5,7499 - EUR: 6,372 - GBP: 7,5548 Fixing Parities EUR / USD: 1,1082 - GBP / USD: 1,3139