JohnGrossCopperJournal

All Over the Map

Back in February, copper was trading in the +/- $2.70 range, and two of the world’s largest copper mines stopped producing due to labor and governmental issues. From that point on, the price of copper vacillated between $2.80 and $2.50 on a Spot basis – hardly what one would have expected.

Last week, the strike at Escondida ended, and production resumed at Grasberg, with the price essentially saying “non-event.”

What gives? It seems that all markets are facing severe cross currents, strong undertows and heavy seas, as they become increasingly complex to analyze (take two aspirins, and start studying technical analysis) properly.

Take aluminum for example. The “miracle metal” is facing a global surplus, ostensibly due to Chinese oversupply, but inventories held in LME warehouses have fallen sharply, while the price is approaching a two year high.

Lead inventories haven’t changed a great deal over the past year, but the price appears to be headed higher anyway. Ditto for zinc, however, the ongoing strike at Noranda, the second largest zinc producer in North America adds fuel to the fire.

As for nickel and tin, whatever may be happening in the fundamentals, prices for these two can’t get out of their own way.

Precious metals look like they want to go higher – again, but we’ve seen this movie before, and have been disappointed each time. Maybe this time is for real, as the dollar retreats further.

Crude oil is losing ground, while natural gas looks to be heating up, and more than a few analysts see equities edging lower, as the “Trump Trade” begins to unwind.

Just another day at the office – Eh?

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