Copper Market: ICSG expects surplus in 2015

After five years in a row of deficits, the copper market should show a production surplus in 2015, according to The International Copper Study Group.

The ICSG forecasts a deficit of refined copper this year of about 270,000 tons, before swinging to a surplus next year of an estimated 390,000 tons. In April the ICSG had forecast a surplus in 2014 of 400,000 tons.

But “operational failures combined with delays in ramp-up production and start-up of new mines, are leading to lower than anticipated growth,” the ICSG stated in its Copper Market Forecast 2014-2015 released Oct. 15 after a two-day meeting at the beginning of the week in Lisbon, Portugal.

After a growth rate of 8% in 2013, world mine production of the metal is expected to grow by about 3% year-on-year in 2014 to 18.6 million tons, and by about 7% in 2015, ICSG says.

It expects strong growth in world mine production next year “owing to additional output from expansions and new mine projects” and says “most of the new production is expected to be in the form of copper in concentrate.”

ICSG forecasts world refined copper production is likely to increase by about 5% year-on-year to 22.1 million tons in 2014 and by a further 4% to 23.1 million tons in 2015. The increases are “mainly supported by expanded capacity at electrolytic plants in China (and to a lesser extent from expanded SX-EW capacity in Africa).”

Global Lead demand may rise to 11.33 MMT in 2014: ILZSG

The International Lead and Zinc Study Group said that global demand for refined lead metal will continue to exceed supply by a modest amount in both 2014 and 2015, forecasting a deficit of 38,000 mt this year and 23,000 mt in 2015.

Global demand for refined lead metal is forecast to rise by 1.4% to 11.33 million mt this year and by a further 2.1% to 11.56 million mt in 2015, the ILZSG said.

Group added that in China, despite a further increase in automotive output and an expansion in the construction of mobile phone base stations that require industrial lead-acid batteries for back-up power, demand growth is expected to slow to 2.5% in 2014 and 2.9% in 2015.

This is mainly due to a slowing of the increase of output of e-bikes that account for a significant portion of Chinese automotive lead-acid battery sales.

WTI Crude Tumbles Back Below $66, Heads For Lowest Weekly Close Since July 2009

It appears the growth-is-back-just-look-at-the-jobs-number meme is not flowing through to the oil complex. WTI just broke below $66.00 (having earlier broken below and bounced back above) and is now down almost 1% on the week having retraced most of Monday's kneejerk dead-cat-bounce. This will be the lowest weekly close since July 2009 and down 9 of the last 10 weeks.

From surging dead-cat-bounce to slow death...

To the lowest weekly close since July 2009...

But don't worry, The White House says

• *FURMAN SAYS MOST U.S. OIL PROFITABLE AT CURRENT PRICES: CNBC

Which is just a lie...

Charts: Bloomberg

The Only Two Charts You Need To Understand The S&P 500

As long as corporations continue borrowing money to buy back their own stocks and the yen keeps dropping, the SPX will continue lofting higher. 

Why is the S&P 500 rising, even as valuations are getting stretched, profit growth is declining and sales are stagnant? Two charts explain it all. Here is a chart showing the S&P 500 companies that have been buying back their own stocks (often by borrowing cheap money to do so) and companies that haven't bought back hundreds of billions of dollars in their own stock.
 

The unmanipulated sector rose a bit, while the stock buyback crowd soared:

Here is the S&P 500, with red lines marking its recent lows:
 

Here is the Japanese yen ETF FXY, with red lines marking its recent highs. The correlation is near-perfect: when the yen drops, the SPX rises.
 

This is a function of the carry trade, in which speculators borrow money in near-zero interest-rate yen and buy U.S. stocks with the cash. The financiers make money in two ways: the buying pushes the U.S. stocks up and the decline of the yen means they can pay back their loan in cheaper yen.
 

But the correlation isn't caused by just the carry trade: it's also a function of trading computers keying on the carry trade for momentum and direction.
 

The correlation is also visible in two ratio charts: SPX-FXY, and FXY-SPX:
 

As long as corporations continue borrowing money to buy back their own stocks and the yen keeps dropping, the SPX will continue lofting higher. If either of these drivers fades or reverses, the rally in SPX will reverse, too.

Sourced From Charles Hugh-Smith of OfTwoMinds blog

Copper decline as demand in China slumps

The analysts confirm that, the decline will remain as it is or move further downward for at least 10 weeks, which will be noted as the lowest since, and the farthest decline since 2013 February.  The value of copper dugged down by 6.6 percent in the month November, and was the highest decline in the value of the metal for the last  17 months. The investors are spreading out, the weak demand for the metal in China, where the  economists have already noted down the weakest expansion since the year 1990.

China is the main consumer of copper, and therefore the decline in demand from China will harshly  affect the commodity. According to the analysts, the decline in demand for copper in China is about to grow further, deeper, and will increase the chances for future decline in the value of the  metal.

The economy of Utah, for a large extend, always depended on copper, for more than a century, as the country  depends on the ore from one of the world’s largest open pit copper mines, Bingham Canyon Mine, owned by Kennecott. 

Aluminum hikes up in the US as demand surges

After declining at the lowest point yesterday since the month of July in the year 2013, aluminum has again regained its posture by increasing its value to 0.3 percent. According to the reports which were published in the month of November, the annual consumption of the automobile industry has been noted as 17.2 million tonnes. The records from the month of October shows that the consumption of aluminum from the construction industry has increased by about 1.1 percent.

A Senior Fund Manager at the Astmax Asset Management Inc, located in Tokyo, Testu Emori, stated that the US based sale of aluminum based automobiles is  very much impressive in number. He also added that the consumption of aluminum in the construction industry is also  positive, and this could bring up tremendous effect on the market of the base metal.

In, London Metal Exchange, the aluminum stored in the warehouse awaiting for delivery has increased 0.3 percent, and has reached 1,983.85 dollars per tonne.

Crude Slides After Saudis Suggest Oil Stabilizes Around $60

Just when industry experts were eying zee stabilittee in oil prices in the last 12 hours, this happens...

*SAUDI ARABIA SAID TO SEE OIL AROUND $60/BARREL: WSJ

And crude oil prices begin to dip once again.

As The Wall Street Journal reports,

Oil may stabilize around $60/barrel, WSJ reports, citing unidentified people familiar.

Suggests Saudis won’t push for supply cuts in near-term, even if oil prices fall further

*  *  *

And the reaction...