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Copper Futures

 Copper futures climb to one-week high on China demand hopes

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October 22nd, 2018

China's central bank governor said last week it would roll out targeted measures to help to ease company financing problems and encourage commercial banks to boost lending to private firms. "The news from China is encouraging for metals," said Eugen Weinberg, analyst at Commerzbank. "Measures that add liquidity will help in the short to medium term, but it won't solve the problem of indebtedness, a problem for some years now."

CHINA TAX: China's tax cuts next year could exceed the equivalent of 1 percent of gross domestic product, a central bank adviser said, in a sign policymakers might be considering another round of tax reductions. GROWTH: China's economic growth cooled to its weakest quarterly pace since the global financial crisis, with regulators moving quickly to calm nervous investors as a years-long campaign to tackle debt risks and the trade war with the United States began to bite. DEMAND: China accounts for about half of global copper demand estimated this year at around 24 million tonnes. China is "multiplying its efforts to support the economy, and in particular, the infrastructure sector amid domestic and international headwinds," such as the trade war with the United States and high debt levels, Fitch Solutions said in a note. The country's demand for copper, an economic bellwether, "will improve over the coming months as property completions and grid investment picks up and demand from the autos and consumer sectors remain buoyant," the research house said.

TECHNICALS: Strong upside resistance for copper is at the 100-day moving average, currently at around $6,320 and support is at $6,115, the 55-day moving average. STOCKS: Traders say significantly higher copper prices in China could encourage further outflows from LME approved warehouses to those monitored by the Shanghai Futures Exchange.

LME copper stocks at 154,225 tonnes have tumbled 27 percent since Sept. 24, while those in ShFE warehouses are up about 27 percent over the same period to 140,789 tonnes. ALUMINIUM OUTPUT: Global primary aluminium output fell to 5.301 million tonnes in September from revised 5.485 million tonnes in August, data from the International Aluminium Institute showed on Monday. PRICES: Aluminium was traded 0.4 percent higher at $2,012, zinc was bid up 1.5 percent to $2,665, lead added 1.2 percent to $2,015, tin was bid down 0.1 percent to $19,150 and nickel was bid up 0.8 percent to $12,550 a tonne.

 - Kitco News.

See Also: Gold, Copper, Silver, Platinum
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