Seeking Alpha

Copper prices post biggest drop in more than two years on China concerns

  • Copper futures slumped to their biggest loss in more than two years as investors worried about slowing growth in China, which accounts for 40% of the world's copper demand.
  • Traders were spooked by China's first default on a bond traded in the mainland, which comes amid broader fears about the impact of China's economic slowdown on demand for industrial metals.
  • Copper prices have lost 9.2% YTD as signs of faltering growth in China have raised the outlook for a surplus.
  • Top publicly traded producer Freeport McMoRan (FCX) -4.8%.
  • ETFs: JJC, CPER, CUPM
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Comments (3)
  • Ajayyy
    , contributor
    Comments (329) | Send Message
     
    Was planning on buying puts on FCX today but it opened over 3% down. Still went with the gut feeling. I see plenty of lot of downside on FCX for the short-term.

     

    Long TCK, Short FCX is my play.
    7 Mar 2014, 04:08 PM Reply Like
  • frank paxman
    , contributor
    Comments (955) | Send Message
     
    You're likely on the correct side of FCX with a short. I'm long from the high 20s, wondering your guestimate on downside from here. Thnx!
    11 Mar 2014, 12:19 PM Reply Like
  • Ajayyy
    , contributor
    Comments (329) | Send Message
     
    FCX avoided the hammering that rest of the miners received in 2013 because the insiders bought a boatload and then some. All those people who bought below 30 will absolutely avoid holding it all the way back to their price and lose all the profits. Those people will sell above 28. Below 28, they are more likely to hold. So I think 27-28 will be the floor for a bounceback.
    11 Mar 2014, 04:14 PM Reply Like
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