Comex copper price hovers near 1-mth low

The Comex copper price drifted listliessly on Tuesday Oct. 18 as investors stepped to the sidelines amid a cloudy Chinese and US demand picture.

Copper for December settlement on the Comex division of the New York Mercantile Exchange inched down 0.15 cents or 0.1% to $2.1055 per pound. Trade has ranged from $2.1030 to $2.1230.

Base metals started the week in the red after disappointing US manufacturing figures, while the dollar surged to a multi-month high.

Additionaly, market participants are taking a conservative approach ahead of the presidential election that will be held on Nov. 8.

“All in all, we are continuing with the wait-and-see approach and are hoping that the automotive sector continues to produce higher production numbers to keep this ship afloat,” Andy Wahl, vice president of BIR non-ferrous metals division, said.

“Until the election is over, it will be difficult to project what direction the economy will take in the first half of 2017. I believe the final quarter of 2016 will remain subdued and flat, looking for sparks of upward movement for 2017.”

Now the focus will turn to Wednesday’s run of economic data from China, which has gained in importance after last week’s forecast-missing trade data.

China will publish its third-quarter GDP growth figure, which is forecast at 6.7%, and will be looking for confirmation that the Chinese economy has stabilised.

In a preview, China’s M2 money supply year-over-year in September grew 11.5%, a touch below the 11.6% forecast. New loans in yuan-denominated terms in September totalled 1,220 billion, beatng the economic consenus of 1,000 billion.

“New loans rose at a much stronger pace than expected in September, highlighting very fast domestic credit growth, in part thanks to proactive fiscal measures,” Metal Bulletin analyst Boris Mikanikrezai said.

“The market is interpreting this data as positive, as reflected by strong price increases in base metals, but we remain concerned about the sustainability of the country’s debt over the longer term.”

Meanwhile in US data, CPI month-over-month was in-line with expectations at 0.3%, while CORE CPI over the same period ticked up 0.1%, a touch off the 0.2% projection.

Turning to US markets, the Dow Jones industrial average and S&P were up 0.5% and 0.8% respectively, while the dollar strengthened by 0.1% to $1.0996 against the euro.

In other commodities, light sweet crude (WTI) oil futures on the Nymex gained 23 cents or 0.5% to $50.60 per barrel, while Comex gold for December settlement was recently trading at $1,263.30 per oz., up $6.70..

(Editing by Tom Jennemann)

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