Sunday, October 23, 2011

Today's Major Market Move: Copper Futures Down 23% for the Year

Copper futures, otherwise known as Dr. Copper because of their ability to diagnose future business activity, have slumped 23% so far this year. According to the good Dr, the patient has a case of excessive debt disease and the treatment calls for a few rounds of 'default' therapy. Unfortunately the patient has been unwilling to cooperate and is opting instead to gulp down handfuls of bailout pills. These are great for easing short term symptoms but do very little to cure the underlying condition.

Click here to go to the live table.

Here's a line chart of Copper Futures against the stock market performance of some of the more notable equity markets (China, US, Germany and Greece). There was a big decline in copper prices at the end of September which the equity markets in US, Germany and China (to a lesser extent) seem to have avoided, mostly due to the news of an additional European bailout. So while most of the global equity markets are enjoying the bailout high, the copper market doesn't seem to be as convinced.

Click here to go to the live chart.

Copper prices would have probably declined even further were it not for supply concerns arising from a strike at the world's 2nd largest copper mine. From
Copper prices remained supported after the world’s second largest copper producer Freeport McMoran Copper & Gold threatened to close its strike-hit Grasberg mine in Indonesia, the world’s second largest.

“We are continuing to assess whether or not the security conditions are conducive for us to continue production,” a Freeport spokesman said earlier.

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