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Copper

London Metals Exchange Week 2023 reviewAs London Metals Exchange Week 2023 wraps up, we summarise some of the key observations for the state of the base metals in 2023 and what are likely to drivers for the markets going into 2024. Better than the macro data would indicate Despite the challenging macroeconomic backdrop especially in China, metal demand is holding up fairly well. Demand indicators are generally holding up better than macroeconomic data would suggest, indicating other forces are at play. The main diver of the discrepancy is likely to be the shift in demand for metals coming from the energy transition. The upside surprise in Chinese demand can be linked to accelerated grid spending in the country which is a metal intensive activity (Figure 1). China has ‘net zero’ ambitions and has been using this era of relatively low copper prices to accelerate the buildout of its grid infrastructure that will be essential for increasing the capacity of electric vehicles on its roads. More broadly, China’s piece-meal stimulus activity is starting to bear fruits. Aggregate financing to the real economy has turned a corner after several months of disappointment and is now rising faster than consensus expectations, which could bode well for further metal demand. It’s worth noting that copper demand in China had not fallen as much as aggregate financing data would have indicated (Figure 2). We believe the stimulus will continue to support the metals market into 2024, although we note that China has not yet offered a big ‘bazooka’ of a stimulus package yet. More metal supply in 2024 Markets are concerned that the supply outages in a range of metals could reverse course next year and therefore start to weigh on price. In its latest projections, the International Copper Study Group (ICSG) now envisages a massive supply surplus of 467,000 tonnes in 2024 (previously 298,000 tonnes). This is thanks to a considerable expansion of refined copper production, especially in China, though new production capacities in Indonesia, India and the US are also set to contribute to nearly 5% year-on-year production growth in 2024. However, the group maintain a deficit forecast in 2023 in the order of 27,000 tonnes, albeit a narrower deficit compared to their April forecast of 114,000 tonnes. Other metal study groups (such as the International Nickel Study Group, International Lead and Zinc Study Group) that met the prior week also expect higher supplies. However, we note that a lot of European metal smelters that went offline during the energy crisis of 2022 are unlikely to come back. Furthermore, these forecasts are based on all planned production coming to the market, which is rarely the case. Usually a 1-2% supply disruption takes place and that has the potential to significantly alter the balance. Nickel oversupply spilling into Class 1 Market participants are increasingly worried about a Class 1 nickel oversupply in 2024. Indonesia’s mining and processing expansion has largely impacted Class 2 nickel. That is the material most suitable for meeting Chinese demand for nickel pig iron (NPI). High quality, Class 1 nickel, however, has been in a supply deficit in recent years. Class 1 has seen increasing demand from battery applications as electric vehicles expand production (and utilisation). However, conversion of Class 2 to Class 1 is looking increasingly economically feasible and Indonesia is at the forefront. There is even potential for a trade deal that could see Indonesian supply become Inflation Reduction Act compliant. That could see US battery demand be met by a new source of metal supply. At the same time, what was thought to be a localised shift to less nickel-intense battery technology in China, could become a more global trend. That is also a source of concern for the market. Market developments The London Metal Exchange (LME) Chief Executive Matthew Chamberlain announced at the main LME dinner that the LME has launched a new collaboration on product development with its Chinese rival, the Shanghai Futures Exchange (SHFE). The announcement came after news last month that SHFE was looking into the possible launch of a nickel futures contract for international use. A much larger proportion of industrial nickel use today is Class 2 rather than Class 1. China is seen as the main venue for transactions in Class 2 nickel and should have a greater role in benchmark price formation. The Class 1 LME contract thus has a degree of disconnect with the bulk of current industrial use and therefore has been seen as an imperfect hedging tool. While the LME didn’t offer much detail about its collaboration with the SHFE, an obvious area for joint work is in nickel. Conclusions Overall, the mood at the LME week was sombre, not just because of the geopolitical events that took place the weekend before the event. However, many were surprised at the strength of current demand. As we have highlighted, commodities tend to be late-cycle performers and we are likely seeing that in play in the current economic cycle. The energy transition is adding further fuel to metal demand that could help the complex during otherwise challenging times if a perfect soft-landing is not achieved. This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
EUREX:FCIN1!
by aneekaguptaWTE
Dr copper potential more downside moveHello traders, lets take a look at copper which testing an important resistance area and see what can possibly happen and what are the consequences of possible bearish move in other markets like us equities. first lets talk technical, price overall bearish Daily move in copper formed a standard #head_and_shoulder pattern in form of consolidation in downtrend move and as we know this chart pattern in the middle of a move showing continuation. As it can be seen price formed clear H&S pattern and now forming possible LH at key resistance area below Daily EMA and at the 4H timeframe 200 EMA. more importantly price failed to close above 3.80$ in the past 3 days. Also we know that copper as one of the most important commodities is very sensitive on economic data, and since central banks are in raising interest rate campaign in order to take control inflation this can be interpreted as lower economic growth and as a result les demand for industrial commodities like copper which can bring prices lower. so now obvious chart pattern and a valid downtrend, price testing important resistance area and failed to break above it and more importantly we have fundamental aspect inline with technical analysis which all together gives good odd to find a trigger to short.
CAPITALCOM:COPPERShort
by mohemati
XCUUSD ( COPPER / USD ) Commodities Analysis 29/08/2022Fundamental Analysis: as of now we can see the global inflation has rise sky rocket and the worlds economy is in a huge bobble which soon will explode and a catastrophic crisis may occur, ultimately most of the manufacturing and development plants which are dependent on the base commodities such as Copper and gold may face some market crises and demand may plummet to a very critically low levels, consequently a lots of the retail and small entities producer and manufacturers will hit the bottom line and bankruptcies if their exposure is not hedged or planned their business strategies accordingly for these days. one of the main reason for this incident can be the changing of the world order and power pole transformation from west to the middle east and far east, Russia's conflicts with Europe and china's with south china's sea and Taiwan. food shortage and probably real state collapse could be predicted and can be a good cause of such a market fall. energy crisis and fuel price jump can be another good reason to decrease the equity and profit margin in the manufacturing and production segments. Technical Analysis: There exist a bearish Divergence of Price and MACD followed with some market fall from its ATH which means bullish trend Reversal and we are facing more falls and a bearish Market, using Fibonacci Retracement levels we have defined some Target Levels which are having confluences with different cycle Fib Levels. we have defined some Resistance levels using Fibonacci and Price Action. we may have some Bullish price correction on the way of the bearish trend. There are total of 4 targets defined using the confluences of Different Fibonacci and Price action levels and they can be considered as strong support levels if not Broken sharply
COMEX:HG2!Short
by BitonGroup
HG - COPPER FUTURES - BULLISH - LONGWill be looking at long positions for instrument for the following reason. • It is approaching a point of Major support in the ranging pattern looking back 3 months. • This is a long-term long swing for me looking forward at least 2-3 months, but it might happen sooner with the recent volatility in the market. • Looking to catch a long trade of the rejection from the support zone. o I would need to zoom in to get a better entry point, once price rejects from the support zone. • Also, I have been studying the Elliott wave patterns, and the 5th wave is usually the point of a major trend reversal. • Also, there is the formation of the falling wedge pattern which adds to the confirmation of a bullish reversal. Of course this is purely a technical approach. **This is just my trading thought process and does not constitute as financial advice. **Please trade with proper risk management**
COMEX:HG1!Long
by MOGBEBOR
HG1! Copper Day Trade 28-Sept-2023TRADE DIRECTION: LONG Price broke and closed above the Short-Term Trendline (red line). Before that, there were many candlesticks with long lower wicks (yellow eclipses) and bullish reversal candles (green arrows) formed around the lower line of the Parallel Channel (green dashed line), indicating buyers had started to accumulate long positions and sellers took profit off their short positions. KEY LEVELS: 1. Short Term Trendline (red line) 2. Parallel Channel (green dashed line) 3. Daily Pivot (Traditional Type) TRIGGER SIGNAL: Bullish Pin Bar (yellow arrow) and prior bullish reversal candles.
COMEX:HG1!Long
by TheDemonTrader
$Copper Trend line break In the context of technical analysis, when CAPITALCOM:COPPER experiences an uptrend trend line break to the downside, it typically serves as a warning sign for investors that the previous bullish momentum may be waning. Such a break could indicate that the asset is shifting from a bullish to a bearish trend. This is often considered a sell signal or at least a reason to reconsider long positions in the asset. Investors considering this development should look for additional confirmation signals such as increased trading volume during the break, bearish candlestick patterns, or other technical indicators turning bearish, such as the MACD crossing below its signal line or the RSI moving below 50. It's also advisable to check for any fundamental factors that may be influencing the price of copper, such as economic data releases or changes in market sentiment, to ensure that the technical signal is not a false one. In summary, a trend line break to the downside in an uptrending CAPITALCOM:COPPER market could be a significant bearish indicator, and investors should exercise caution and consider employing risk management techniques like setting stop-loss orders.
CAPITALCOM:COPPER
by AlgoTradeAlert
COPPER Two year Triangle is about to break out!Copper (HG1!) has been trading within a Triangle pattern for more than 2 years and recently the price action has gotten so narrow that it prompts to a break-out soon. The 1D MA50 (blue trend-line) has been acting as the Pivot level while the 1D MA200 (orange trend-line) had the last rejection on record on September 01. The 1D RSI since the May 24 Low has been printing a similar price pattern to July - October 2022 (so far). That fractal was also using the 1D MA50 as the Pivotand after it broke its Resistance, it rose aggressively almost as high as the 2.0 Fibonacci extension. We will purse a more modest target, below the 1.5 Fib at 4.2000. The R/R is worth it as a break below the Higher Lows (bottom) of the Triangle will make us close the trade on minimum loss and open a sell instead targeting 3.5500 (Support 1). ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
COMEX:HG1!Long
by TradingShot
Silver - A 50% Long Setup. Trade Only. No HODL.In a post on Silver from June, I analyse that a run to $33 is on deck: Silver - 33 Moons And An Options Opportunity In the time that has passed, we've had two ~10% bounces that have been sold off. To me, this is a peculiar pattern for a trendline play that leads to new lows in the immediate term future, and represents confirmation that $33 is on deck. However, I'm also expecting a very bearish September across all markets, which I outline in a recent call on Nasdaq: Nasdaq Futures - Are You Prepared For Red September? Because I believe that we'll have a giant rally that takes out the tops of a lot of things heading into the end of 2023, and 2024 will mark the beginning of the real economic calamity. When it comes to silver and gold being bullish in the long term, they should be, but the market manipulators will keep price supressed for a few reasons. The first is that a renaissance in precious metals, or even a bubble in precious metals, will amount to promoting bullion, coins, bills, and even ore. These things are mankind's traditions, and are at odds with the current International Rules Based Order (IRBO) pseudo-Chinese Communist Party culture that more or less wants to install something like a cross between Shanghai's Zero-COVID social credit system and the Taliban. The second is that China, which is still governed by the CCP and Xi Jinping, has bought an incredible amount of gold in recent times, if reports are true and not fabricated at least. And so a short raid on precious metals would amount to a de facto economic sanction against China, which the IRBO claims to be de-risking against. Moreover, if something should happen to the Party, whether that be natural disaster, a greater pandemic, Xi performing a Gorbachev-style coup against the Party overnight, or Heaven finally dealing with the CCP's 24-year persecution and organ harvesting genocide against Falun Dafa's 100 million spiritual practitioners, because China holds so much gold, there will be open selling into the market. Prices will crash because the very wealthiest families on this planet are safeguards of tradition and will take advantage of the situation to purchase back that physical bullion and jewellery at record low prices amid the chaos. "Buy when there's blood in the streets, even if it's your own," they say. So here's the current call on silver. The fake double top below the early May gap at $25.5~ is definitely manipulation. It's traded back too far and hasn't shown any bullishness to give us confidence that we're going to go from $23 to $26 or $27 as a breaker pattern. Because "resistance" has been printed, many very large players and retail traders who are short will position their stop losses over $26 and $27. This becomes a target. And in the meantime the goldbug moonboys have long stops under $22 and $21, which just so happens to be an untested gap. So the trade here is to either look at a short on a retrace to $24 with a target of $21~, or just wait for $21 with a target of $33 by year end. And then sell it all. Sell your spot. Sell your bullion, if you can't be hedged short. Silver will eventually truly appreciate, and in a significant way, but it's not very likely to manifest before the new future unfolds. And so in 2024, we may really see numbers sub $15 again. Ergo, because metals are, in reality, ranging and not trending, it's not a market for "buy and hold" to be an intelligent strategy. Good luck.
COMEX:SI1!Long
by LordWrymouth
2
COPPER: Neutral. Wait for a breakout.Copper is technically neutral, as also dipicted by the 1D outlook (RSI = 50.817, MACD = -0.013, ADX = 24.251) inside the HL trendline of the Bullish Megaphone and the LH trendline of the January High. This movement can only offer scalping opportunities. If you want to commit beyond those, buy over the LH and target R2 on the medium term (TP = 4.1950) and sell under the HL and target S2 (TP = 3.5450). ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
COMEX:HG1!
by InvestingScope
3
Industrial metals continue to face headwinds as Chinese data disIndustrial metals were the worst performing commodity sector last month and were down 2.7%1. Over the last six months, the sector is down 15.2% and has created the biggest drag on the overall performance of commodities. China's real estate sector, once the engine of its economy, is now teetering on the edge of crisis because of excessive borrowing, overbuilding, and a housing slowdown. The government's crackdown on risky practices and sudden intervention in 2020 to prevent a housing bubble have led to over 50 Chinese developers defaulting or failing to make debt payments in the last three years. The consequences include reduced consumer spending due to falling housing prices, disappearing jobs tied to housing, and decreased business confidence. While policymakers have taken modest steps to address the situation, the real estate turmoil has spread to financial institutions and the broader economy, prompting concerns of a larger crisis. A build-up in industrial metal inventories over the last 3 months is consistent with market expectations of ample supply of the metals for the rest of the year, given relatively modest demand. Zinc inventory is up 96% while lead inventory is up 85% compared to 3 months ago. This is clearly weighing on sentiment towards industrial metals. Copper (COMEX) was down 2.8%1, and aluminium down 2.8%1. The only bright spot in the basket was lead, which was up 3.7% last month. Speculative positioning in COMEX copper has been oscillating between positive and negative territories in recent months and entered negative territory again last month after briefly becoming positive2. COMEX copper inventory is up around 46% compared to 3 months ago. And although copper held in COMEX is one of the smaller stores of the metal, when combining London Metal Exchange, Shanghai Futures Exchange and COMEX, copper inventory is still 27% above where it was 3 months ago. Nickel was down 5.7% last month1. Although nickel is widely known for its use in electric vehicle batteries, a growing market, it still draws around two-thirds of its overall demand from the production of stainless steel. China's steel market has been facing pressure in August due to continued high steel production despite sluggish end-user demand. Blast furnace utilization rates have risen, but some local mills in key steelmaking provinces like Hebei and Jiangsu have not received official communication about output reductions. Uncertainty surrounds the extent of China's steel output cuts for the rest of the year, with expectations of smaller scale cuts targeting environmentally sensitive regions. Rising steel inventories are attributed to robust production and weak demand. Despite potential production cuts, market sentiment remains cautious due to these challenges, and steel prices have declined. This, in turn, is weighing on nickel. Source: 1 Bloomberg as of 21 July 2023 to 21 August 2023 2 Commodity Futures Trading Commission (CFTC) as of 15 August 2023 3 change in inventory over the past 3 months by United States Department of Agriculture This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
COMEX:HG1!
by aneekaguptaWTE