Let me repeat that.
Copper, copper, copper......
in near collapse
and....
,
Posted on 03/28/2013 10:48:51 AM PDT by dennisw
Daily finance & investment thread (3-28-13 edition)
Trying to focus on the markets for today and each day and the economic news
This is where you can impart some investment wisdom to your fellow freepers. You can vent about the big one that got away. You can chime in how Obama is out to wreck American capitalism.
If you see another FR economic thread you like and want to link to it here, please do
Post your favorite economic site links. Your favorite economic blogs and precious metals blogs and sites
Apmex.com is a solid place with good reputation to buy precious metals and has great presence on ebay for easy quick impulse buys such as a gift for a college boy's graduation. College Girls too! Even high scoool.
Kitco is the best site for gold and silver charts and other precious metals information
Ping list -- on or off let me know here or via freep-mail. If I missed you then Freep-mail me
I might ping you to other interesting economic threads a few times a week. One per day maybe
Sites that posters have reccommended ------ zerohedge turdferguson
ping
Let me repeat that.
Copper, copper, copper......
in near collapse
and....
,
Apologies to Otis Redding
Lower copper means slowing world economies. Where WalMart comes out with lower sales figures, their target customers are tapped out. Money’s too tight to mention....for them at least
TGB is still holding. Of course they have other commodities as well.
Copper drops from 3800 to 3420, or 380 point drop, in about 2 months.
A 10% drop in 60 days is near collapse?
interestingly silver is down almost about 3% as well.
In light of the allegedly good eco news being pumped and very low interest rates allegedly spurring housing activity, it ain’t good. Now the eco news isn’t exactly gangbusters but it is allegedly “continuing” earlier-in-the-year price strength. It’s not unprecedented and to my eye, may be somewhat seasonal as well. I will ring up SAJ for his insights into copper seasonality.
Yes, I call it a fairly dramatic price drop.
I would be looking a little more at BHP and JJC.
“interestingly silver is down almost about 3% as well.”
There is sort of a flavor difference as I see it, in that nobody accumulates copper (well, maybe that is not true, because there was a great deal of Chinese warehousing of Cu because it was a way to get money out of the banking system and was used as collateral for lots of bank lending over there) as “bullion”...it’s considered strictly a pure-demand-driven industrial metal with its finger on the pulse of industrial activity, both anticipated and real.
Yes, silver has that component, but there is a semi-vibrant investor class into silver and it is somewhat influenced by central bank goldwhacking.
Copper is something to look at because of the whole “Dr. Copper” thing. As are the DJ Transports which have made what is probably a generational move on....nobody knows what.
No disagreement - I like to watch silver because of it’s duality. It is used in a lot of electronics now because of the legislation such as RoHS causing a drive away from lead solder. In many applications tin can’t be used due to whiskering, so silver solders have seen heavier demand as the different industries has transitioned over the past 10 years.
I was just a bit suprised that the change was so much closer to the Cu change than to the Au fluctuation.
and now I’ve noted the exacting precision that I used in terming it “almost about” :)
...and as a result, we should do what????
No simple answer, as usual, but the takeaway is that somebody is lying, big time. The observation is that there is a huge divergence in what is being sold and what is actually happening. That does not mean that stocks have to go down nor does it mean that they continue to rise, although I remain slightly skewed to bullish side. Not because of fundamentals, but because of money flows: there’s no other place to go.
There is an additional factor in that this is the end of the quarter, where we expect stock losers to be tossed out and winners to be goosed.
Over the past few weeks, three very telling stocks, CAT, ORCL, and FDX have given up ALL their 2013 gains...and then some. A cyclical, a tech, and a transport. Of course that means nothing, nor does Cyprus mean anything.
IMO we are going to see a “sell in May” type of year and things are likely to get kind of squishy later this year. Europe is definitely not over. There is opportunity in the oscillation between “ouch! fixed! ouch! fixed! ouch! fixed!”
cycle of things over there, but the winners have been those who bought (or stuck out) the panic. So far.
Copper is used in ammunition which is in high demand at this time so copper should be up.
I think the amounts used in ammo (USA) aren’t significant enough to offset decreases (worldwide) in other areas.
Take this FWIW:
I just spent 3 days in San Antonio at the AFPM International Petrochemical Conference.... I met, personally, with a couple of CEO’s, VP of Sales, and Purchasing VP’s from several chemical companies...
To a man/woman: In the US? They are BULLISH. The shale gas/oil revolution is NOT slowing down.. it’s accelerating. There is more than $100 BILLION in new investment targeted for the US in the next 5 years... all, formally announced.
There has not been a new Ammonia plant built in the US since 1967... 48 have been announced. 7 are under construction already. Each cost $500-800 Million.
Same for Ethylene plants... NONE have been built since 1997. 5 years ago, it was COMMON to assume that NONE would ever be built here again. Now? 7 have been announced... 3 are already under construction.. each cost more than $1.5 Billion.
Companies with large car fleets, like UPS and FED Ex, and taxi’s... are switching to Natural Gas cars... they could eventually spread out.
Bottom line is... The USA is economically advantaged in ENERGY vs the rest of the world.. except the mid-east. This has NOT been the case since the mid-90’s. This helps a LOT of businesses... besides just chemicals. I actually heard the word “RE-SHORING” used several time.... with regards to manufacturing jobs.
George W Bush was a speaker at this conference.. but, he really said NOTHING of interest except, possible.. that HE and his MOM were both trying to convince Jeb to run for President.
The only negative I heard? EVERYONE is worried that the US government will KILL the golden goose with environmental regulation.
Investment-wise?? I’d recommend LYB, or WLK...
Great post, thanks.
So interesting that the advance in gas energy came while the bureaucrats were off working on other things.
It's a bit of an overstatement to say that copper has "collapsed". Oh, it's in a bear mkt, not a doubt. The boffins can say what they like about the world economies and so forth, but there is so much bloody copper sitting idle in Shanghai and other (particularly Chinese) locales that it should be quite a time before we see a copper bull raise its head again.
"Seasonality" is less of a factor at this time than it might otherwise be, because we have had, over the past few years for the most part, a concerted effort on the part of several large (presumptive) users to accumulate physicals. As ever, such an effort becomes overextended...and so it is right now.
Slowing of the world economy? Doubtless part of it. Oversupply in the hands of not-strong-enough holders. Oh, yes. However, to my way of thinking, there is a better "the world-economy-is-slowing-gasp-and-how-can-we-make-any-money" trade just now.
Recommend buying (say) Dec WTI crude and selling Dec Brent against it. Cheap trade, from a capital standpoint, perhaps $2000 per lot or so. Point being that the trader has AT LEAST 3 things going for him in this trade: 1) putative slowing of the "world" economy, 2) DEFINITE slowing of the Wonderland (that's the Eurozone, for those in Rio Linda) economy(ies) which are now formally in recession, and 3) most interestingly, the landlocking of some MMBB's of Cushing (WTI) crude is slowly ending, and will end much more quickly as Keystone XL gets nearer to approval (this is a done deal; even the Kenyan realises that the tree-bark eaters in his administration are a political detraction to him, and they are slowly fading out of the picture).
With WTI still$9.00-$10.00 per barrel or so, basis Dec, over Brent due to the artificial distribution situation from Cushing, and given that the (haha) normal historical differential is about $1.50 with Cushing over Brent, a patient trader can -- assuming only that this artificial situation is slowly easing AND that the "world" economies will not somehow catch fire again within 6 months' time -- reap somewhere between 3 and 8 dollars/bbl by simply buying the WTI and selling the Brent.
The grains report out today, showing that stocks are considerably larger than previously thought (there's a reason for this misperception, btw), indicates strongly that soybeans will follow their usual seasonal tendency versus corn for the next 60 days or so. Recommend buying 1 contract of July soybeans and selling 2 contracts of July corn against. Monday rates to be a bit more of a bloodbath in this trade (corn might even open down the limit) so, if you want to participate, do it EARLY Monday (or wait for a bounce off the limit, should corn open limit down), and don't A) be too fussy about entry prices and B) be averse to some wildish swings, because there WILL be some over the next 2 months. There is good historical precedent for more than $2.00/bushel profit for 1 line (that's what one 1 vs 2 spread is called, just btw) of this trade. Risk no more than 50 cents/bushel. Trading with a 4-1 profit/loss potential tends to keep one's books VERY nicely profitable.
Best trading to you, always!
Thanks for the ping/thread-start; posts. Very interesting.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.