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Copper Crash Continues - Hits 1-Month Lows
Copper prices are now down almost 6% from the top 2 days ago on China's RRR cut. As 266.40, this is the lowest price for the perhaps-economically-sensitive commodity in over a month. Not exactly the picture of 'stimulus' the PBOC was hoping for...
5 week lows for copper...
Close up, not pretty...
Charts: bloomberg
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Dr copper has been dying while stocks continued to ramp and be pumped by the Federal Reserve. What a game.
Indeed, but not a game to be played by the likes of me or Mr. Sarao, apparently.
Baltic Dry Index ain't looking so swell either.
What a manic market. Volume was above normal during this morning's drop, now running below normal for the pump.
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dieeeeeee
lower prices are a stimulus. well, for everyone except money printing loving central bankers that think lower prices are the work of the devil.
Copper is a backbone metal since it's used across all industrial sectors. Things are starting to unwind, so hedge your bets if your still playing the game. Of course if your a member of the Cramer Clown Posse it's time to buy, buy, buy......
it's time to Hang Seng bitches! maybe Cramer will bang his gong tonight wearing his samurai outfit BUY BUY BUY
Arrest that guy too!
Since 1990 copper prices have barely doubled and recoverable ore grades halved, whilst money supply has quintupled.
Tsk, your bringing reality in to it and that's not allowed....
Chinese must be selling their phantom copper stored in empty warehouses in order to buy moar Chinese stawks!
They mine 17 million tons of it a year. Let that sink in for a moment.
Great commodity bull market is finished. Copper is plentiful and heavily recycled. Without Chinese construction and without significant growth outside of the US, this is the fate of most commodities. USDX to 120 or maybe 150. Oil to $20. Copper to $1.50. Gold to $500. S&P to 2500 (minimum).... where is Jim Sinclair? I need another "Gold to $50,000/oz" prediction to make me laugh. Oh yeah... he's busy selling TRX before it goes to 0.
Yep
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Why would someone think that copper should cost more than it did 2 months ago or 6 months ago ?
Do we have more global production to use more copper than 2 months ago? Why did it go up in first place.
It is not crash but coming back to normality. Prices should be stable and not change 3-10% every month, i shouldn't change more than 1-5% every year.
IMHO real global production is worse than in 2006 when copepr was 1500 so should be at 1300-1400. Same with silver it should go to levels from 2006. If.. if we had same amount of money :) but QE created global inflation. Still weird that silver is higher than in 2006.7.8 and copper is MUCH lower than copper was in 2006,7,8
Question: When copper drops below a price where it is feasible to mine and smelt it, what happens to the price of silver (since 70% of the world's supply is simply a by-product of base metal mining, primarily copper)?
It will drop like a stone. Without demand, supply is irrelevant.
But will demand for cell phones, computers, and medical imaging drop like demand for skyscrapers? I think not. If the demand, and thus supply, of copper drops 50%, then the supply of silver will drop 35% and I can't see the demand dropping by a like amount.
A lot of copper is used in building construction, not just the buildings themselves, but also the infrastructure that goes in before construction. China's building boom has slowed alot since 2007 and the US housing market is not exactly booming like it was in 2007, so I think that is why prices have come down.
Just because you can't see it deos not mean it won't happen. Substitues for gold and silver in electronics are already growing along with recycling.
Iron Ore prices are killing North Eastern Minnesota, home of America's largest Iron Mining Industry. In a few weeks, 1,100 Iron Miners will be fired and two mines closed. The Union Official was asked on the radio what he thought could re-open the mines. He answered "China needs to rebound!" So you see, even the hard core American Uinon Miner knows that China is the economic super power upon whom his job depends, not America.
The copper price crash puts a number of new planned copper mines up here under threat. Large investors may flee when they see the copper price, leaving the new mines without investment capital.
A super large high end vaction home project on the shores of Lake Superior was killed in 2009 when investors grabbed their cash and fleed the project for over 1,000 lake side town homes and condos.
The main street economy, the economy where real people live, is being killed.
Maybe they could get jobs being doormats for the 0.0001%. There is no future in providing raw materials for humans.
Chopper down !