Copper Showing Green Shoots, U.S. Style

Are we back? Copper seems to think so.

Copper has had a major move up from its lows of six months ago. Crucial to that move have been falling copper stores. LME is the largest copper market in the world. Its stores have been steadily dropping which have supported copper price.

While LME stores have been decreasing, Comex supply has been climbing due to weak U.S. demand. Comex is a much smaller exchange for copper than LME. However, Comex tracks what is occurring in the United States. While the rest of the world (emphasis China) has been building, the United States use of copper has been contracting. For over the past six months, CME stores have been relentlessly rising (just the opposite of LME).

That countertrend is breaking. CME stocks have begun to show signs of easing.

Copper is showing green shoots, U.S. style.

Comments

[rick12345:]

Finally, someone who understands that the US is not the only industrialized economy in the world. The price of copper, like many other commodities, increases alongside economic prosperity; You would have to be brain dead not to see this.

Jun 29 06:28 AM

[PutneyHillYank:]

You know a sweet play is TGB

Jun 29 06:51 AM

[Bill Herbert:]

Good observation.

U.S. copper consumption turning upward is very bullish for the general market, and obviously, copper stocks, which got slaughtered last year, but are now rebounding nicely.

My favorite is Quadra Mining - it will be at $10 before long, I would wager.

I expect copper to gradually approach the $3 mark as the second half of the year unfolds - that will be the new benchmark price going forward, with occasional spikes above that based on Chinese demand that appears to be steady, and growing.

Jun 29 11:05 AM

[Stone Fox C...:]

Whats interesting about Copper is that we haven't had a bull market in both China and US demand for a long time and copper still got to $4. Now that US demand will likely turn north as housing has finally bottomed, it'll be interesting to see what happens when both markets demand more copper.

Jun 29 12:51 PM

[bassmaster17:]

Today's panic/anger selling is most likely from hedge funds that bought it in the $55-$62 range. Not a bad price to pay if one has a long term time horizon...FCX is good business.

Jul 06 02:11 PM