Copper futures ended nearly flat Thursday, supported by some better-than-expected US economic data; however, futures remained under pressure due to the sentiment that the global economy is barreling towards another recession.
On Thursday, copper prices plunged as China’s released a preliminary purchasing manager’s index of 49.4, signalling that the world's largest copper consumers economy is contracting.
Copper futures edged down half a percentage point in early trading Thursday, however, trading volumes were thin as traders adapted a wait-and-see approach ahead of anticipated statements by Federal Reserve chairman Ben Bernanke and President Barack Obama for further insight into the state of the US economy.
With the end of the seasonal lull for copper just around the corner, traders are uncertain what direction prices will move come September, when demand typically rebounds.
The copper market has continuously been plagued with labour disputes for years, however, this year strikes have been especially prevalent with workers believing that they are entitled to larger pay cheques and benefits as they perceive that their employers are “raking in the cash” on the back of high metals prices.
Scrap copper is an important source of the red metal. The use of scrap copper is expected to rise in the coming years, as a necessary means to compensate for declining supplies of mined copper.
In an interview with Resource Investing News, Yu-Dee Chang principal at ACE Investment Strategists Inc. attributed the recent volatility of copper prices to the “shift of investment demand in copper from small speculators to larger hedge funds.”
The copper market has been rattled by an increase in worker uprisings, as employees are, once again, asking for increased wages and job stability as they see their companies raking in profits on the back of relatively high copper prices.
Copper prices climbed over $9,500 per tonne for the first time in two-months Monday, as supply concerns ushered investors back into the copper market.
In an interview with Copper Investing News, Yu-Dee Chang, Principal and Chief Trader at ACE Investment Strategies weighed in on the perspective that as an industrial metal, copper is the “most crucial” of the critical metals.
Thursday, September 29, 2011