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Copper

Commodity OutlookRecession may be a red herring for a market fuelled by a supercycle While broad commodities have outperformed most major asset classes year-to-date1, the pressure of rising interest rates, a strong US dollar and fears of several large economies tipping into recession has led to a pull-back since the summer of 2022. In our Market Outlook, we argued that the current negative business cycle pressures on commodities are likely to be temporary and give way to the larger forces pushing the demand for commodities higher and constraining supply of those commodities. Historically, commodities have been a cyclical asset class, generally declining when the business cycle turns negative. But even history illustrates that commodity prices can continue to rise long after a business cycle has turned if fundamentals are supportive. Oil price shocks in the 1970s and 80s are a case in point. Admittedly they are unusual cycles but, today, we are likely to be living in another energy price shock. Energy price shocks continue Since we published our Market Outlook, the Organization of the Petroleum Exporting Countries and partner countries (OPEC+) has announced a large cut to oil production from November 2022, amounting to 2 million barrels per day. As we expected in our Outlook, OPEC+ reacted to the price weakness in oil after the summer and sought to raise prices of Brent oil to over US$90/barrel (prices had fallen to US$84/barrel on 26 September 2022, just over a week before the OPEC decision). They have been successful in keeping prices above US$90/barrel since that decision but have laid the groundwork for further cuts by painting a pessimistic picture on demand forecasts (giving the group an excuse to intervene in the market again). Meanwhile, the Ukraine war shows no sign of improving and natural gas supplies into Europe from Russia have fallen to a trickle. The European Union has taken various measures to try to soften the shock. However, we view several of the proposals with scepticism. For example, introducing price caps on natural gas imports could simply divert natural gas to other countries and worsen the energy shortage for the EU. Interfering with price benchmarks, such as the Title Transfer Facility (TTF), could send incorrect pricing signals and lead to overconsumption of energy resulting in additional shortages2. Supply shortages of commodities extend beyond energy A combination of rising energy prices and interest rates have driven many metal smelters to shutter production. High fertiliser prices (petrochemical product) are also constraining crop yields. Looking across the commodity spectrum, all commodities have lower-than-normal levels of inventory. Base metal supply is especially low The inventory of base metals is considerably lower than their respective 5-year averages, yet base metals have seen the largest price declines of all the commodity sub-sectors. The markets are pricing in demand weakness from an economic deceleration. However, demand has not weakened yet. On the other hand, supply is declining fast. Let’s take the example of copper. The International Copper Study Group (ICSG)’s first forecast for 2022 copper balances (demand less supply), cast on October 2021, was for a sizeable surplus of 328 thousand tonnes. Its latest forecast (cast on 19 October 2022) is for a deficit of 328 thousand tonnes in 2022. Judging by historical revisions, their 2023 forecast of a surplus is likely to be revised down. Their initial forecasts tended to assume no production disruptions. Yet, as we have observed this year, production disruptions can be very large. China’s economic deceleration is countered by policy support China’s zero-COVID polices have slowed economic growth and, thus, its demand for commodities. That matters because China is the largest commodity consumer in the world. However, its central bank has been loosening policy and President Xi has called for an ‘all-out effort’ to increase infrastructure spending (and given local governments free rein to raise debt financing to fund these projects). However, the future course of China’s policy will become clearer after we write this blog. At the time of writing (21 October 2022), China's 20th Communist Party Congress is still in process and will wrap up in the coming days. Xi Jinping is poised to clinch his third five-year term in charge of the nation. We expect national security to take a greater role in policy priority than the economy. Commodity supercycle An energy transition and a revitalised global infrastructure spend are likely to drive the demand for commodities significantly higher over the coming years. However, today, we are living in the down-phase of a business cycle. Even though many commodity markets are visibly tight, commodities are not sufficiently pricing the tightness. The Inflation Reduction Act in the US and the Infrastructure Bill are both strong tailwinds for commodity demand. In Europe, the sharp focus on weaning off Russian energy dependency is adding a new urgency to the energy transition, and we expect to see accelerated energy infrastructure plans take place. Conclusion As a headline, economies going into recession doesn’t inspire huge confidence in a commodity rebound. However, history does suggest that an economic slowdown combined with high inflation has been associated with positive commodity and gold performance. The energy price shock has set off a vicious circle of supply contraction from metals, fertilisers, and other energy intensive commodities. The energy transition and infrastructure led supercycle remains in play even if short-term business cycle phenomena dictate headlines today. As we emerge from this phase of the business cycle, we may find commodity markets extraordinarily tight.
CBOT:AW1!
by aneekaguptaWTE
Copper Futures (HG1!), H4 Potential for Bearish DropTitle: Copper Futures (HG1!), H4 Potential for Bearish Drop Type: Bearish Drop Resistance: 3.6920 Pivot: 3.5545 Support: 3.3840 Preferred case: On the H4 chart, we have a bearish bias. To add confluence to this, price is under the Ichimoku cloud which indicates a bearish market. If this bearish momentum continues, expect price to possibly head towards the Pivot at 3.5545, where the 61.8% Fibonacci line is. Alternative scenario: Price may go back up towards the resistance line at 3.6920, where the 38.2% Fibonacci line is. Fundamentals: There are no major news.
COMEX:HG1!Short
by Genesiv
1
Copper down 5 days in a row; 3.5545 is keyThe industrial metal topped on March 7th at 5.0395. However, for the next 3 months, HG sold off aggressively and made a July 15th low at 3.1315! Fears of increased inflation, increased interest rates, and increased Covid cases in China led to a fear of lack of future demand. Copper traded between 3.2430 and 3.7830 from mid-July and November 10th, when it gapped higher the day after a lower-than-expected US CPI reading. However, Copper was stopped just short of the 200-Day Moving Average near 3.9600 on November 14th, and it hasn’t looked back since. After a 5-day selloff, is copper ready to bounce? News of additional lockdowns and the “take-back” of a loosening of restrictions caused Copper to continue lower. Copper traded to horizontal support on Monday near 3.5545. If this price breaks, copper may easily fall to 3.3625. The next horizontal support levels are at the lows from September 28th at 3.2430, then the lows from July 15th at 3.1315. However, don’t be surprised if there is some profit-taking ahead of the long US holiday at the end of the week. Sellers will be looking to add to shorts if price does bounce. The first resistance level is at the August 26th highs of 3.893, then a confluence of resistance at: 1. the highs of November 14th 2. the 200 Day Moving Average, 3. the 61.8% Fibonacci retracement level from the highs of June 3rd to the lows of July15th. This resistance zone is between 3.9600 and 4.0250. However, 3.5545 seems to be the “make or break” level for copper. If it breaks, copper could be on its way to the next support at 3.3625. But if it holds, it could bounce to the 4.000 area!
COMEX:HG1!
by FOREXcom
Copper (COPPER/INR) Commodity Analysis 18/07/2021 Technical Analysis: As you can see, there exist a hidden Bullish Divergence with MACD which is the sign of bullish trend continuation as Copper has started its bullish wave since March 2020. It is moving in an ascending channel. We draw Fibonacci retracement from the low to the top of last impulsive wave which are defined as the Fib levels on chart. The commodity fell to 78% Fibonacci Retracement and it is consolidating and accumulating on Fibonacci Golden Zone currently. we believe this commodity is getting ready to shoot to the higher targets which are defined by Fibonacci Projection tool of the past wave.
MCX:COPPER1!Long
by BitonGroup
Metals to Break its All Time High AgainMetals to Break its All Time High. I have discussed about Gold before and in this tutorial we will study into Copper. From last week Fed chairman statement, he said “it is premature to be talking about pausing our rate hike. We have a ways to go." The continuous inflation is almost a certainty into next year, and what asset or instrument works well with inflation? Content: Why interest in copper again • Fundamental • Technical 5 Major Copper Uses: • Building Construction • Electronic Products • Transportation • Industrial Machinery & Equipment • Medical Copper Consumption Worldwide: 1. China 54% 2. Europe 15% 3. Other Asia 14% 4. America 11% 5. Other 6% Source: Statista 2021 Minimum fluctuation 0.0005 per pound = $12.50 0.001 = $25 0.01 = $250 0.1 = $2,500 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
COMEX:HG1!
by konhow
2
#COPPER Weekly Major Support & Resistance Levels.Providing Weekly Support and Resistance levels for next coming week based on Central Pivot Range and its major support & resistance levels of week, where price can take support and face resistance. Three black lines indicating weekly Central Pivot Range. Previous week high & low also performs as a major support and resistance levels. Can take long & short positions according to how price perfoms at particular given support & resistance levels.
MCX:COPPER1!
by Jha_Nidhi
Dr. Copper: Melt-Up Has BegunMassive daily green candle broke out of 3-month pennant and gaussian channel after bouncing off multiple moving averages, most importantly the 200 week SMA. The move also has the highest volume since March. Long RSI trend has been broken too. Back in July, I called for a bottom and an accumulation phase for copper (See Below). It played out. Price needs to take out the August high to confirm that it's out of accumulation phase, but with such strong momentum, it wouldn't be surprising if price disrespects it on Monday next week.
CAPITALCOM:COPPERLong
by Indotermes
1
Copper - Is Copper About to Become the New Gold?Copper Linear Mode Hourly/Monthly With the recent breakdown in gold it seems unlikely to expect appreciation in copper although this chart suggests otherwise. Is copper about to become the new gold ? The Monthly chart shows copper has completed a wave 4 pattern at the lower channel as shown. On the hourly chart prices are currently printing a bullish pattern that will unfold in a larger wave 5 up. Although there is more than one possibility to label the current structure I believe a breakout of the diagonal will confirm this is in the early stage of a wave three pattern upward. This should be a powerful move up so put it on your radar. MONTHLY
COMEX:HG1!Long
by oliverrathbun
Industrial Metals: Copper the king of green metals!I have a long-term positive outlook on the industrial metal sector given the increase in demand towards the electrification of the world. I expect a dampening in shorter-term prospect however a renewed surge to fresh record high's in the new year by miners around the world, most notably from Central and South America as well as Africa. This will lead to copper gaining momentum due to electrification of the world (Less dependency on Russia). Massive amounts of new copper is needed in the years ahead for the power grids to cope, we are already seeing producers like Chile, the world’s biggest supplier of copper, struggling to meet production targets. China’s slowdown is viewed as temporary and the economic boost through stimulus measures is likely to focus on infrastructure and electrification—both areas that will require industrial metals. I have chosen Freeport-McMoRan Inc. as my trade idea, often called Freeport. Freeport is an American mining company based in the Freeport-McMoRan Center, in Phoenix, Arizona. The company is the world's largest producer of molybdenum, is a major copper producer and operates the world's largest gold mine, the Grasberg mine in Papua, Indonesia. FCX is looking strong with a strong financial situation and growing Inventories at good levels. Copper demand is increasing, electrification around the world will continue into the future.
NYSE:FCXLong
by JaredBooysen
1
Copper analysis and ideas: Will bears come back?Copper prices may remain under pressure in the coming months due to investors' apprehension about China's growth prospects in the wake of the 20th National Congress of the Chinese Communist Party, which disappointed the market. Since September, copper prices have fluctuated within a relatively narrow range (3.2-3.6) after the earlier sharp declines occurred this year. The long-term case for copper remains strong, as it is a key metal for the energy transition and global inventories are currently very low. However, one of the main challenges it faces in the near future is its dependence on China’s economic growth. The brown metal will remain under pressure unless China announces new growth-friendly economic policies to counteract the predicted slowdown in the country’s economy. However, the latest China Party Congress appears to prefer fostering sustainable growth and giving more importance to inequality, national security, and ideological matters. Copper bull markets have historically coincided with periods of extraordinary global growth, driven primarily by China. We have now reached a crossroads in that regard, and if China is unable to maintain high and consistent economic growth, copper will have to wait for a new global wave of coordinated investments toward the development of renewables and green energy. However, given the issues with inflation and rising interest rates that we are currently facing, it may still be years before the transition fully takes hold on a global scale. This could take the price of copper subdued for longer. When we look at the daily chart, we can see that some bearish pressure was forming near the 78.6% Fibonacci retracement level of the 2022 range. Also the 50-day moving average has been a quite strong dynamic resistance later. The technical picture remains overall on the bearish foot, and copper needs to clear the 2022 trendline at around $3.75 and then cross the psychological $4.00 mark before materially inverting the downtrend.
CAPITALCOM:COPPER
by Capitalcom
SCCO:Correction or Reversal?SOUTHERN COPPER CORPORATION Short Term - We look to Buy a break of 48.98 (stop at 45.51) Price action produced another positive week, last week. Trading within the Wedge formation. The bias is to break to the upside. A higher correction is expected. Our profit targets will be 58.22 and 60.00 Resistance: 48.90 / 60.00 / 80.00 Support: 46.80 / 42.00 / 34.00 Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Signal Centre’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Signal Centre.
NYSE:SCCOLong
by VantageMarkets
Copper Futures (HG! ), H4 Potential for Bearish MomentumType: Bearish Momentum Resistance: 3.5875 Pivot: 3.3815 Support: 3.2415 Preferred Case: The H4 price is in a downward trend and crossing below ichimoku cloud. The price may drop form the pivot at 3.3815, where the 61.8% fibonacci retracement is to the 1st support at 3.2415 where the swing low and 78.6% fibonacci projection sits Alternative scenario: If there is a price reversal, price will move to 3.5875, where the swing highs and 78.6% fibonacci retracement are. Fundamentals: There are no major news.
COMEX:HG1!Short
by Genesiv