Weekly copper market 11/16/2020.Support us by consulting our free daily magazines with color stock charts and weather maps on our commodity-market-review.com website.
TECHNICAL ANALYSIS OF COPPER
Last week, COMEX copper futures closed higher at $3.1780 per pound.
Hopes for a vaccine are fuelling the markets, Moderna announced very encouraging results on Monday. The pandemic continues unabated, we have just surpassed 54 million cases worldwide, with more than 1.320 million deaths. Faced with the second wave, Europe has been confined. The United States is the most affected country with more than 246,000 deaths and more than 11 million cases, and is also taking restrictive measures such as in New Jersey and Michigan.
The copper market is still bullish, the hope of a vaccine with Pfizer or Moderna, as well as the prospects of a massive recovery plan with the Biden administration are carrying the markets. The dollar is still low and in a bearish trend, the DXY closes Friday at 92.755.
In addition, copper stocks are historically low and declining. COMEX+LME+SHFE stocks are at 357979 MT. The good health of China's manufacturing sector and its willingness to accumulate stocks is fuelling the upward movement. Chinese industrial production was up 6.9% in October, for the 7th consecutive increase. Over the first 10 months of this year, Chinese imports were up 40% compared with 2019, with 5.6 million tonnes of refined copper compared with 4 million tonnes in 2019. China is the world's largest copper importer.
ECONOMIC RESULTS
- Last week, Chinese exports increased by +11.4% in October, and imports on the other hand disappointed with +4.7% against +9.5% expected.
Industrial production in the Euro zone dropped to -0.4% in September for +0.7% expected.
- On Monday, the Chinese industrial production was +6.9% in October, the unemployment rate in China is 5.3%.
The New York FED manufacturing index fell to 6.30 in November from 10.50 in October.
- Tuesday, US retail sales and industrial production.
- Wednesday, Euro zone inflation, US building permits.
- Thursday, U.S. Unemployment Claims, Philadelphia FED Manufacturing Index.
CERTIFIED COPPER STOCKS
- London Stock Exchange copper stocks are down to 165200 MT from 172450 MT last week.
- Copper stocks on the Shanghai Stock Exchange were down to 117949 MT from 139657 MT the previous week.
- Copper stocks on the New York Stock Exchange rose to 74830 MT from 73568 MT the previous week.
- Total copper stocks were down to 357979 MT compared to 377339 MT the previous week. Total copper stocks are below the five-year average.
THE DOLLAR
The DXY index representing the Dollar against a basket of foreign currencies closed last week up to 92.755, after a sharp decline in early November. The U.S. elections will continue to bring volatility to the currency market. Joe Biden will be sworn in on January 20, the Senate remains Republican for now, but a second round will be held on January 5 in Georgia. There is still a lot of uncertainty about the size and date of the famous plan to support the American economy. The Fed has announced that it will increase its "firepower" if necessary. Forex traders therefore anticipate an increase in the money supply.
The pandemic is not weakening, Europe has reconfirmed itself in the face of the second wave, the United States is also taking new measures of restrictions in certain states. The hope of a vaccine, with the announcement of Pfizer, calms the markets and prevents for the moment the dollar from playing its role as a safe haven. Caution is still called for, however, as many questions about vaccines remain unanswered. The dollar has a strong influence on the price of raw materials, and it will be very difficult to predict its evolution in the coming months.
A low dollar is generally favorable to the dollar-denominated raw materials market.
