Metals Massacre - Iron Ore Enters Bear Market, Copper Collapses To 1-Month Lows

Tyler Durden's picture

The hype surrounding the credit-fueled resurgence in base metals in the first half of 2017 has crashed and burned on the altar of reality in China's slowdown with industrial metals from copper to iron ore and zinc all plunging in the last two weeks. Odd that we don't hear much from mainstream business media discussing the implications for a global coordinated economic growth narrative...

Since the start of September, industrial metals have been hammered (as stocks soared)...

 

Iron Ore prices have crashed into a bear market...

As Citi describes it, complete carnage in Iron Ore today down over 6% on day as local specs reduce length ahead of holiday in China on the first week of October as bearish sentiment continues to gather pace. After peaking in August at $80 as we saw surging demand for high grade ores. Iron Ore started to trend down in early September, which reflected that fundamentals had begun to turn weaker. The tightness of high-grade ore market I referred to is now starting to gradually resolve as more supply coming online from Brazil and Australia. Demand is softer, as we see little improvement in China's steel consumption . Steel inventory also built as environmental inspections and steel mills' enter maintenance. We remain bearish on the long-term outlook of iron ore and expect 2018 prices to average $53/t so a ways to go. Needless to say today's move in IO has driven base prices lower with Nickel and Zinc taking the brunt.

Even Dr.Copper has given up...

And here’s some more grist for the doubters who scoffed at copper’s rally to a three-year high earlier this month.

The metal for immediate delivery on the London Metal Exchange cost $40.75 less than benchmark three-month futures on Tuesday, the biggest discount since 2009.

That market structure, known ascontango, shows “there’s no part of the world where copper is really scarce,” said Rene van der Kam, Singapore-based managing director of trader Viant Commodities Pte Ltd. He says to expect more losses after a pullback in prices this week.

And finally, as we warned previously, bear in mind that the lagged response to China's credit impulse is about to hit base metals... The rise and fall in China's credit impulse that has been so highly correlated (on a lagged basis) with industrial metals for the last eight years...

It appears "Dr.Copper" and his economics afficcianados are about to be relegated to "ignore" status once again.

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thevekja's picture

Hopefully this means a drop in Pb prices

Cash2Riches's picture

The markets are attempting to alert us, to ring the alarm bell, that another financial crisis is coming. Sadly, this one is going to make 2008 look like a cake walk. Keep stacking.

DieselChadron's picture

HAHAHA... as if what happens in the physical world even matters.  All of these metals have their respective derivative contracts and therefore, the "prices" are determined by the money creators.

gmrpeabody's picture

Might also help if the chart you are glancing at is a little longer time frame than 30 days...

realmoney2015's picture

Agreed. I care more about long term trends as well. 

realmoney2015's picture

I'll keep saving pre 1982 copper pennies. Just won't be selling my stash anytime soon. 

Pretty sad when our money has been devalued so much that even copper is too precious and valuable to include in our coins. 

We need to end the Fed. And go back to a sound monetary system based on real money, gold and silver. 

That's why we sell candles with silver coin prizes: www.scentsaverscandles.com 

We also have a Facebook page where we spread awareness on these issues! 

https://m.facebook.com/scentsaverscandles

We need to end the Fed. Inflation is theft!!

Grandad Grumps's picture

Just manipulations ... it is not based on free market dynamics. There has been an excess of supply pretty much forever.

HRClinton's picture

THIS is how we bribe China to take out Lil Kim?

By giving away resources? 

Wow, that's some special kind of stupid, that's even harder to fix than regular stupid.

Mr.BlingBling's picture

Massacre? One MONTH lows?!?

Who's writing these headlines? The Daily Mail?

SybilDefense's picture

With China as the #1 buyer of gold the past few years, how can their credit rating go down?

jmack's picture

      Very easily if you are printing  trillions more than you stacking.

illuminatus's picture

Very obviously paper covers rock.

MFL5591's picture

Intentional losses caused by none other than the Tribal scum on Wall Street and in DC.  Dispicable shit people!

max_leering's picture

Au and Ag both getting monkey-hammered once again... fucking manipulators at CME and London

China crtedit downgrade?... remember- mid Oct crude for yuan for gold in effect

GodHelpAmerica's picture

More manipulations so the cartel can exchange more worthless fiat for real assets and real money.

They can never stop printing. That's all you need to know.

StackShinyStuff's picture

Manipulation my ass. Shit's on sale just buy it and stack it pussies.

max_leering's picture

upvoted... keep stackin' bitchez!!!

loves the truth's picture

Why do they classify gold as a commodity?

bankbob's picture

Chinese now make 35 times more concrete than the USA does.  And, it is all for local consumption.

That is why they keep tearing down 5 year old buildings and building new ones. It gives people jobs and it uses up excess materials.  But it is FAUX GDP.

That is also why they are building islands off the coast.  The Defense community wants them and it gives them a place to dump concrete.

Nature_Boy_Wooooo's picture

Take away their shovels and give them spoons.

wisebastard's picture

its max keiser using virtual specialist tech. it "predicts" a futrue price and then fills in the orders to get there. its pure market manipulation and im not sure how its legal, but if i had to guess it would be max keiser is one hell of a cock sucker and blankfein's wife aint doing it for him

 

bankbob's picture

Also - BEWARE of the 19th Peoples Congress coming up soon.  Xi will appoint himself his own successor.

And, the Party may vote to discontinue funding a lot of these FAUX GDP projects.  And, that will hurt.

Treason Season's picture

Hey you insufferable slave to alliteration, it's "Metals' massacre" with an apostrophe indicating plural possesive which means the metals were massacred not doing the massacring. Buy a fucking grammar book Synder.

Cardinal Fang's picture

"One word, Plastics"

Herdee's picture

October coming, watch out.

Son of Captain Nemo's picture

"Odd that we don't hear much from mainstream business media discussing the implications for a global coordinated economic growth narrative..."

Nough said!

Or perhaps we just don't need those "other" barbaric relics to build buildings and use them for industrial purposes ANYMORE?!!!

silverserfer's picture

if copper holds above $3 for too long the tweekers start ripping up the infastructure agian. must supress price below $3 to prevent it. may explain why domestic miners get subsidies and tax breaks.

 

$5 copper and the likes of Joe Sixpack start heading out on their copper safari's. 

Tapeworm's picture

Duh, I should have replaced my roof with Cu when it was eighty cents per pound.   Of course I did not do that. Silver was in the low fours so i did that. Last Argentum buy was at 4.705 per oz for fifty x 100.

    I always have wanted to do some investment castings of "Barbie". I will learn how to do that. Englehard will not mind too much. It's better than doorstops.

moonmac's picture

When the US Commerce Commission imposes a 100% import duty on China and India will they respond by?

A) Devalue their currency

B) Increase Government Subsidies

C) Ship material thru another Country

D) All of the above

SaulAzzHoleSky's picture

Is a 1-month low really a collapse?