Slowing Demand for Supply Weighing on Copper Futures

Copper futures are said to be spiraling lower not only because demand has been hampered for the raw material, but now there’s confirmation of that by the lack of requests to withdraw copper from the London Metal Exchange warehouses – the lowest since March, 2013. Copper futures is down $4.50 per pound today (as of this writing), currently trading at $2.38 at New York’s Mercantile Exchange.

Copper is used in many things in our daily life, such as car’s, electronic devices and power lines, but stockpiles of the industrial metal have reportedly doubled over the last two years as consumption has all but dried-up. China, the world’s biggest copper consumer, is experiencing slower economic growth hampering demand for the metal, but they are just one country of many.

There is simply too much physical copper available with a fundamental view,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, regarding the fundamental assessment of the copper futures markets. Craney added, Being that copper is considered an ‘industrial metal,’ it may take not only China’s economy, but other nation’s economy to turn the copper market around.”

Copper futures trend is clearly down with no bottom in sight. A bounce higher should be required before traders even consider taking a short position because the risk (volatility) is quite high.

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