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Ardent Listener
Administrator
USA
4841 Posts |
 Posted - 06/03/2008 : 14:25:32
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Copper Drops for Second Day on Concern Usage in China May Slow
By Millie Munshi
June 3 (Bloomberg) -- Copper fell for a second session on speculation that consumption may cool in China, the world's biggest user of the metal.
China's manufacturing growth slowed last month, raising concern that the country's copper consumption for appliances and other goods may trail estimates. Stockpiles of the metal monitored by the Shanghai Futures Exchange have surged 85 percent this year. Before today, copper futures fell 16 percent from a record reached in May on concern global demand may drop.
With ``questions about Chinese demand lingering, copper seems to be struggling,'' Edward Meir, an analyst at MF Global Ltd., said in a report today.
Copper futures for July delivery fell 1.85 cents, or 0.5 percent, to $3.578 a pound at 12:26 p.m. on the Comex division of the New York Mercantile Exchange. The metal dropped as much as 1.7 percent yesterday, to $3.545, the lowest since March 24.
Manufacturing growth in China eased in May, the CLSA China Purchasing Managers' Index showed yesterday. The gauge declined to a seasonally adjusted 54.7 last month from 55.4 in April.
A slowing global economy will hurt the price of all commodities, including copper, U.S. Federal Reserve Chairman Ben S. Bernanke said today in a speech in Barcelona, Spain.
``Commodity prices will level out,'' Bernanke said in the prepared text. That is ``consistent with our expectation of some overall slowing in the global economy and thus in the demand for raw materials.''
The metal also fell today as Bernanke signaled that the Fed is done cutting interest rates for now, boosting the U.S. Dollar Index, a basket of six major currencies including the euro and yen, to a two-week high. Bernanke also said higher commodity prices risk accelerating inflation.
Cheap Dollar's Role
``Bernanke has finally admitted the central bank's cheap- money and cheap-dollar policy is partly responsible for fueling the rise in commodity prices,'' John Kemp, an analyst at RBS Sempra Metals Ltd. in London, said in an e-mailed note.
The Fed cut U.S. bank borrowing costs seven times since September to 2 percent, spurring a rout in the dollar and sending commodity prices surging. Copper touched a record $4.2605 on May 5 partly as inflation-expectations boosted investor interest.
The dollar index rose as much as 0.8 percent. The U.S. currency also gained as much as 0.8 percent against the euro, and traded at $1.544 per euro at 12:27 p.m. in New York. The dollar weakened to a record $1.6019 per euro on April 22.
``The stronger dollar sent prices for commodities lower today, and copper just joined right in with that,'' said Ron Goodis, a futures-trading director at Equidex Brokerage Group Inc. in Closter, New Jersey. ``There is a downtrend in copper that is starting to be established.''
The UBS Bloomberg Constant Maturity Commodity Index, a gauge of 26 raw materials, fell as much as 0.7 percent today.
On the London Metal Exchange, copper for delivery in three months fell $25, or 0.3 percent, to $7,905 a metric ton ($3.59 a pound). Before today, the metal had gained 19 percent this year.
To contact the reporter on this story: Millie Munshi in New York at mmunshi@bloomberg.net.
Last Updated: June 3, 2008 12:30 EDT
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Think positive. |
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Ardent Listener
Administrator
USA
4841 Posts |
 Posted - 06/03/2008 : 14:53:22
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The stronger dollar sent prices for commodities lower today, and copper just joined right in with that,'' said Ron Goodis, a futures-trading director at Equidex Brokerage Group Inc. in Closter, New Jersey. ``There is a downtrend in copper that is starting to be established.''
Let's suppose, just suppose, that the U.S. is able to maintain a stronger dollar. How would they be able to do that? The only ways I can see is to either cut spending/raise taxes. So if they want to slow down the economy then perhaps they could maintain a stronger dollar for a while. But wouldn't a stronger dollar mean more people would want to import more goods from China?...........Provided they have the dollars to begin with of course.
Now if they are able to maintain growth in the economy and maintain a stronger dollar then that may be bad news for gold but great news for copper over the long term.
I believe that the recent price run up in copper was due to a fleeing of investors or speculators from the dollar. They weren't really so bullish about copper, but rather they were bearish on the dollar. In other words, they were using copper and a lot of other commodities as safe havens in addition to traditional gold.
But over the longer term I also believe that copper will not need such speculators in order to see higher, but more stable prices due to increased industrial world wide demand.
In the mean time it's nice to have your copper in pennies at face value. |
Realcent.forumco.com disclosure. Please read.
All posts either by the members, moderators, and the administration of http://realcent.forumco.com are for your edification and amusement only. It is not the intent of realcent.forumco.com or its host to provide investment, medical, matrimonial, legal, security or tax advice and nothing posted here should be considered to be so. All rights reserved.
Think positive. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/03/2008 : 18:43:17
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The stronger dollar sent prices for commodities lower today, and copper just joined right in with that,'' said Ron Goodis, a futures-trading director at Equidex Brokerage Group Inc. in Closter, New Jersey.
Stronger dollar............
Perhaps someone could explain what they mean by 'stronger dollar'?
The US Dollar is still below 80 and has been since mid September 2008, the dollar has been losing buying power for decades (I read in an old investment book how the dollar valued at $1.00 in 1944 went down to 69¢ in 1968.)
Lastly, look at the M3 money supply (if you can find it anywhere.) Would a strong or strengthening currency be printed so much as the US Dollar?
But of course, I am using reason and logic to state my point of view, not the make believe illusion the world of high finance uses. |
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redneck
1000+ Penny Miser Member
1273 Posts |
Posted - 06/03/2008 : 20:35:41
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Quote;
Stronger dollar............
Perhaps someone could explain what they mean by 'stronger dollar'?
The US Dollar is still below 80 and has been since mid September 2008, the dollar has been losing buying power for decades (I read in an old investment book how the dollar valued at $1.00 in 1944 went down to 69¢ in 1968.)
Lastly, look at the M3 money supply (if you can find it anywhere.) Would a strong or strengthening currency be printed so much as the US Dollar?
But of course, I am using reason and logic to state my point of view, not the make believe illusion the world of high finance uses.
BINGO...!!! - We have a Winner...!!! |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/04/2008 : 18:25:51
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BINGO...!!! - We have a Winner...!!!
Its so nice to win something for once. |
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misteroman
Administrator
USA
2565 Posts |
Posted - 06/06/2008 : 00:53:21
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Did you mean sept. 07?
Also even if china is cooling isn't it still very expensive to keep mining with gas and everything being so high that it should keep it up anyway? |
Buying CU cents!!!! Paying 1.2 unlimited amounts wanted. Can pick up if near Ohio area. |
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Copper drops for second day - China usage may slow
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