Copper - Back above $3lb!

[YOUNG_TRADER]

Just saw Copper is finally back above the $3lb level

Thoughts?

 

[wayneL]

Nice bounce, but still some work to do before we can call it a bull again.

 

[Sean K]

Nice bounce, but still some work to do before we can call it a bull again.

Above 325/30 ish will be good.

 

[vishalt]

yea nice bounce, looks like itlll break that downtrend line past $3.20 whichd be good to see

 

[Halba]

Comeback noted, but higher prices will suppress demand again.

 

[rederob]

comeback noted, but higher prices will suppress demand again

Oh, like it is with nickel.....

 

[Halba]

Copper is not nickel....high prices encourage substitution...nickel there just isn't enuff of it atm. :luigi:

 

[rederob]

Copper is not nickel....high prices encourage substitution...nickel there just isn't enuff of it atm. :luigi:

Let's see, we can't substitute nickel at $50k/tonne because there is not enough, but we can with copper at $6k/tonne because there is plenty.
Yep.
I got it.
Copper is not nickel.
:1zhelp:

 

[Halba]

There is limited substitution going on with nickel. However the price of nickel is arguably gone beyond fundamental limits and is a 'bubble' now. Hard to compare apples with oranges here... :bowser:

I myself think copper is no value at $3/lb. Should be closer to 2.20 a pound. There are many mines and mine supply outlook is there in the next few years.

 

[bvbfan]

No doubt the decline is copper inventories is behind this move but could it also be some flow on from hedge funds reducing risk and exitting their short positions?
Copper didn't really suffer that much from the meltdown (from what I remember) compared to other metals

 

[CanOz]

Let's see, we can't substitute nickel at $50k/tonne because there is not enough, but we can with copper at $6k/tonne because there is plenty.
Yep.
I got it.
Copper is not nickel.
:1zhelp:

What is the substitute for copper? Just curious, but i would have thought nickel was easier to substitute.

Cheers,

 

[Halba]

Aluminium, sells for $1.25/lb, cheaper alloys using this.

Scrap metal too.

 

[nioka]

Aluminium, sells for $1.25/lb, cheaper alloys using this.

Scrap metal too.

Aluminium would not be a suitable substitute for nickel in coins. Copper has been used before and will be used again. Most 'silver' coins are only worth as much as the last of the copper ones anyway. Don't know how much influence it would have on either the copper or nickel price but it would have some. I'm sure the mint is looking at it by now.

Nickel coins will soon be worth more as scrap metal.

 

[YOUNG_TRADER]

It held $3 lb last night (eventually) which I thought was good

 

[BREND]

While inventory level at LME has been falling since Feb 07, inventory level at Shanghai has been rising for the same period.

I don't think that demand for copper has improved, people are just taking advantage of the big gap difference between copper price in Shanghai and LME. Once the price gap between Shanghai and LME narrows down, we should see falling of copper inventory at LME stops.

 

[YOUNG_TRADER]

Hi Brend,

Sent u a pm

Was concerning a rumour I heard yesterday from some investment bankers about a 1 Billion Tonne Short position in the copper market

Also that Copper imports to China are at an all time high,

What price level do you and others see Copper stabilising at for say the next 3 months?

I personally am bullish on the next 3 months for copper


Also Brend sorry but can you explain this a bit

"I don't think that demand for copper has improved, people are just taking advantage of the big gap difference between copper price in Shanghai and LME. Once the price gap between Shanghai and LME narrows down, we should see falling of copper inventory at LME stops."

I can't understand the gist of that statement, are you saying copper is cheaper on LME than Shanghai hence peeps are buying off LME instead of Shanghai?

Thanks in advance

 

[BREND]

Hi Brend,

Sent u a pm

Was concerning a rumour I heard yesterday from some investment bankers about a 1 Billion Tonne Short position in the copper market

Also that Copper imports to China are at an all time high,

What price level do you and others see Copper stabilising at for say the next 3 months?

I personally am bullish on the next 3 months for copper


Also Brend sorry but can you explain this a bit

"I don't think that demand for copper has improved, people are just taking advantage of the big gap difference between copper price in Shanghai and LME. Once the price gap between Shanghai and LME narrows down, we should see falling of copper inventory at LME stops."

I can't understand the gist of that statement, are you saying copper is cheaper on LME than Shanghai hence peeps are buying off LME instead of Shanghai?

Thanks in advance

In the month of Feb, LME Copper inventory falls 26,800mt, but Shanghai roses 32,111mt. Doesnt just look like a change of hands? If there is real demand, how come the net is still a rise?

 

[YOUNG_TRADER]

Looks like Chinese stockpilling to me,

So as I asked, where do you see copper over the next 3months,


I see a $3 - $3.50 range

 

[BREND]

Looks like Chinese stockpilling to me,

So as I asked, where do you see copper over the next 3months,


I see a $3 - $3.50 range

I don't know. Copper is becoming like a gambling pawn for hedge funds nowadays, there is hardly any valid explanation for their movement except funds' movements.

I can tell you frankly that the fundamental for copper is weak, price should not go to this level based on fundamental alone.

I rather invest into other metals that are less speculative.

 

[rederob]

There is limited substitution going on with nickel. However the price of nickel is arguably gone beyond fundamental limits and is a 'bubble' now. Hard to compare apples with oranges here... :bowser:

I myself think copper is no value at $3/lb. Should be closer to 2.20 a pound. There are many mines and mine supply outlook is there in the next few years.

\
Halba
What/where is your evidence about lack of nickel substitution?

On copper, it's easy to say it's only worth $2,20.
However, it never got there on the big dipper, and has now rallied strongly on excellent fundamentals.
Yes, there is plenty mine supply. But there is also very strong demand for copper.
The dangerous game to play is guessing the impact of US housing on copper demand. Despite a massive housing slump, Comex copper inventories are presently declining!!!
Industry consensus has copper concentrates in potential deficit for the next 2 years.
How likely is that?
In my view it is a high probability because Eastern demand is increasing beyond supply, while the US situation suggests a generally balanced state.
Behind all this is metal destocking, tight scrap availabilities, and firm buying on price dips.
The commodity bull rides on copper's back, and copper's back.....
with a vengeance.