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Copper Futures Crash Close To '1' Handle Amid Record 14th Daily Drop In A Row
Front-month (Dec) copper futures are trading near $200 ($200.15) for the first time since March 2009 as the collapse in the global economic indicator extends to an unprecedented 14th day in a row. The ongoing collapse appears to have finally impacted Chinese equities which have given up the morning's gains and are drifting rapidly lower. Overall, as Goldman warns, the metals market appears to be increasingly pricing concurrent and/or future weakness in China’s old economy.
This is the longest losing streak on record (based on Bloomberg data) and is the worst 14-day loss (down 13.8%) since October 2011...
With a break of $200 being heavily defended for now...
However, as Goldman Sachs details, rising SHFE open interest may flag China demand deterioration
Metals prices have declined by 12%-17% since late October. Over this period, China’s economic data for October has disappointed, the US dollar has strengthened on a trade weighted basis, and the broader commodity complex has moved lower, including most notably, energy prices.
What has also occurred since late October has been an eye catching rise in Shanghai Futures Exchange open interest across the metals complex – for copper, it has been the largest increase in Shanghai open interest in 12 months – since the 1Q15 collapse in Chinese metals demand.
In our view, this development raises a red flag regarding ongoing and near term activity in China’s ‘old economy’ and metals demand growth, as measured by our GS China Metals Consumption Index (see chart below). Indeed, over the past five years, periods of rising SHFE open interest and falling metals prices have been associated with concurrent or imminent weakening in China’s commodity intensive ‘old economy’.
Meanwhile, though LME and Comex net speculative positioning has also declined over the period, it remains well above its August 2015 lows.
Overall, the metals market appears to be increasingly pricing concurrent and/or future weakness in China’s old economy, and related metals demand. To the extent that the metals market positioning predicts ongoing and potential future China growth weakness – since mid-2011 SHFE open interest has given a correct bearish signal on four out of five occasions – the latest metal market developments have bearish implications for China’s upcoming activity data releases and asset classes dependent on this data.
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It appears Chinese stocks have started to recognize this is a problem...
Charts: Bloomberg
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Time for a warehouse to have a mysterious "copper fire", and collect the insurance.
Metal burns, when ignited with cerosine. I heard that somewhere.
Gold - The money of kings
Silver - The money of gentlemen
Copper - The money of beggars
Paper - The money of con-men
Bitcoin - The money of hackers
"Copper - Money of Innovative Mining Operation in Urban Proximity"
There, Boris is fix for you.
Boris...
Did you consider my Silver Mining Proposal?
Since there are Silver contacts in every circuit breaker then those are a Silver Mine just awaitng exploitation.
Plus the Circuit Breakers also have that Copper in them as well.
People will leave their homes with that Electrical Panel unlocked, primed, and ready for harvest.
All it takes is a screwdriver, a hammer, and a torch to melt the solder attaching the Silver Contacts to the brass.
It is only after they get home from work that they begin to wonder why there is a blackout, or, if they forgot to pay the Power Bill.
Isn't that an innovative Mining Operation in Urban Proximity?
(SERIOUSLY FOLKS...LOCK YOUR CIRCUIT BREAKER BOXES.)
And you do know what a Gold Miner is...Just another liar with a hole in the ground.
If someone breaks into my house and takes time to steal my breaker box precious, I'm pretty sure they'll bring the tools for the job against a padlock.
Been on the buying side of that. Usually a "family" shows up with a beat up station wagon from another state, towing a trailer from a third state. We told them to go pound pickles. Sadly, there is always a yard that will buy it.
What has happened to the global consumer that used to buy Chinese products?
1) The once wealthy Western consumer has had all their high paying jobs off-shored. As a stop gap solution they were allowed to carry on consuming through debt. They are now maxed out on debt.
2) Japanese consumers have been living in a stagnant economy for decades.
3) Chinese and Eastern consumers were always poorly paid and with nonexistent welfare states are always saving for a rainy day. Western demand slumped in 2008 and the debt fuelled stop gap has now come to an end.
4) The Middle Eastern consumers are now too busy fighting each other to think about consuming anything and are just concerned with saying alive.
5) South American and African consumers are busy struggling with economies that are disintegrating fast.
No wonder China isn't doing well.
Perhaps now is time for China for enjoying ownership of own useless junk...
I still am wondering why some PM dealers continue to sell copper rounds and even bars. Useless, unless you want to give your pet crow a shiny gift.
Cause people like me are part crow.
So, in Deflationary times, tertiary wealth (cash, stocks) rule for a while: "Cash is King." Especially if King Dollar is as strong as it is now.
It allows you to acquire real/primary assets (resources, energy, commodities) cheaply, and thus rebalance portfolios.
Aye. The US dollar is in deflation.
Kirk2... I had it explained to me in clarity today.
"It's the debt stupid"
on asking WTF
"You are such a dope, the debt load for so many countries has in effect sucked the life out of expansion. They cannot take on any more so its over, it needs correction and that is coming when ridiculous low interest rate have allowed expansion beyond what can be repaid.It has encouraged bad investments and when they thought Inflation would take care of the charges and pay the expansion off over time they found that there was in fact negative inflation and the cost to pay had risen. The only solution is to allow the defaults that must come to clean out those with inability to pay."
Then I thought of that quote from Ludwig Von Mises about the only way to correct a credit expansion is to either abandon it or wait for a total collapse.
"They have abandoned it (was the reply) but they print, lie and obfuscate to cover the payments due, thus further indebted become the nations until they exhaust the breath, then comes the collapse. Not one grain of rice was produced from printing so there can be no benefit to any man"
Now I understand the fall in demand from the producers of expansion (commodities) and its screaming to all to run away
For every action there is an opposite reaction.
For every debtor there is a corresponding creditor.
Lenin had a solution - just liquidate the creditors.
Nice silver is now below 14$
Catch a falling silverware?
Gold at $1068, Platinum at $848.
Hmmmm. What comes next?
$900 gold has been in the cards since the top a few years back.
Hillarious how all of these "stackers" have had their "wealth" stolen by the FED...anyone that bought at $1800 has now lost 42% of their "investment"...many are lucky to be even in the last decade or more...so smart...gold will protect from the FED...and now the FED has used gold to steal their wealth.
Just wait, just wait...gold is going to $5000..yeah right...THE WORLD IS BROKE and the gold bugs have already bought all they can afford...WHO WILL THE BUYER BE AT $5000?...America is the "richest country on the planet" and yet the average American has less than $500 on hand...and even with gold at $500, they'd still rather spend thier last $500 on an iphone than gold.
As for copper, go ask plumbers about their copper usage...around here it's PEX...way cheaper, faster and way easier to install...no more setting the house on fire with a torch...it's like snapping together Legos; anyone can do it.
Copper wire? Forget about it..cut open the cable on that Chinese shit you own...the wire is silver colored...some mix of cheap metals...copper usage in wire is waning.
Your sense of scale is extremely askew
“Average cost per foot for three-quarter sized copper is between $2.50 and $3.00. Where PEX is more between $.50 and $1.50 for the same size piping, so it’s almost half as much less for the material. Your labor is more between a quarter and a half as well."
Kiss copper goodbye for residential use.
http://www.angieslist.com/videos/video-whats-best-plumbing-pipe-your-hom...
It's what slum-lords use (have to use), to prevent theft of copper piping.
I too learned the hard way that the poor or unemployed have no more integrity or honor than the rich or employed. Probably less so, out of desperation or character flaws.
I put PEX in all my Detroit properties, and ended up selling them (to Chinese) last year.
Long copper and slate roofs for the affluent.
Yeah, PEX is great - until age, and thermal expansion / contraction fatigue pop a couple pipes.
Time for a down to the studs tear out, re-plumb, and rebuild.
Got insurance ?
No ?
Tough shit.
I wonder how long before we get negative prices for copper?
In the year before the Canadian penny was phased out you could pick them up on the street by the dozens as people just threw them away.
The great rotation continues. Who wants to speculate on the timeline here?