Copper drops to record low in 27 years
Copper has been on the downward spiral, with a record low since April 1986.Weakened demands led to drop in manufacturing in China and the United States which are the world’s top metal consumers.
Copper slipped to about $7,016 per metric ton on The London Metal Exchange equivalent to 0.3 percent since the last three months, as opposed to the lowest since December 4th, whereas it was at $7,030.50 in Tokyo. The declines have led to a 4.3 percent loss.
According to data from the Institute for Supply Management, January saw expansion in factories at a crippling pace over a period last eight months, declining orders at a greater degree since December 1980.
The market has still not withdrawn by the bolt it suffered from China which in turn is affecting the supply-demand equation as well as the production surplus is in rough waters.
The last 12 months has seen copper fall by around 15 percent in London, as economic growth in China was steadily taking pace.
The supply-demand equation was disturbed with an exceeded supply to demand ratio by 385,000 tons this year against 45,000 ton surplus in 2013 with prices expected to slip further.
This year has seen about $2.9 trillion being wiped out from value of global equities with China’s economic turmoil and the Federal Reserve increased slash of stimulus on the 29th of January. An 18 percent jump was monitored in Copper stockpiles at the Shanghai Futures Exchange, the highest spike since October. Last month saw a 3.7 percent fall of six main metals traded in the LMEX index, the worst since 2010.
Also depreciating was the Motor vehicle sales in the US, which recorded the weakest in the last three months at an annualized rate of 15.16 million.
The week long holiday in China due to the Lunar New Year has reduced liquidity and further upped its woes. A copper test $7,000 before the Chinese markets open is expected by the end of the week. The Comex in New York didn’t change much for the Month of March at $3.1855 a pound
Aluminum broke its 12 day losing streak in London and rose 0.2 percent to $1,681 a ton almost the same as the lowest intraday level since July 2009.Technical analysis indicate a rebound is on the curve as the relative-index fell below 30 the previous day
Zinc extended its decline to another day as on the 10th day it fell by 0.5 percent in London recording the longest continuality in terms of losses since January of 1989 whereas tin and nickel saw a decline ,lead didn’t face much change.