Most metals – both precious and nonferrous fell last week, with support lines broken, or soon to be challenged. Further, a brief glance at the Price and Inventory Report in The Copper Journal shows the majority of metals down on a year-to-date basis, and now, year-over-year as well.
And once again, contrary to logic, and the laws of supply and demand, most inventories are also down on the week, year-to-date and year-over-year. Interestingly, or perhaps it is with pain we admit, that just a few months ago, nonferrous metal prices were headed north as inventories were going south, telling us that higher, rather than lower values were to be expected.
But the world changed in June, and when it did, the charts were alerting us to changes in our markets as well. The period around June 8th was key, and that was about the time of the escalation of trade issues going into the G7 summit in Quebec.
It’s safe to say there hasn’t been much concrete progress on these critical issues, leading us to believe that ongoing trade tensions will continue to weigh on the market. And if that weren’t enough to make prices sag, the rising dollar will continue applying pressure.
There is little point in trying to guess how low prices may fall, or how long it will take to reach bottom, but if there is one thing we are are absolutely certain of, it is that the seeds are now being planted that will give birth to the next Bull Market. And that you can take to the bank.
John Gross is publisher of The Copper Journal. If you would like to learn more about profitably managing your wire and cable inventory, hedging strategies or gaining additional insight into metals pricing, email John by clicking here or calling him at 631-824-6486.