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    The Copper Journal Weekly Report: Turning the Corner?

    Jan. 22, 2019
    For week ending Jan. 18. Nonferrous metal prices all rose last week, with support lines holding, and overhead resistance either being tested, or already broken.

    Ed. note: Today, we begin a new, regular feature in Contracting Business. This weekly update on metals prices by John E. Gross is timely, given the tariff situation in the U.S., and the importance of raw materials to HVACR manufacturing. John can be reached at [email protected].


    Perhaps Buffalo Springfield said it best: “There’s something happening here, what it is ain’t exactly clear.”

    And that pretty much sums up the markets for us at right now.

    Last week it was observed that metals were looking a bit better, but our confidence was tampered with caution.

    We take that view to a higher level now, as nonferrous metal prices all rose last week, with support lines holding, and overhead resistance either being tested, or already broken.


    And at the risk of repetition, again, and again, already low inventories continue declining, thereby providing fundamental support to the improving technical picture.

    But the thing that has us increasingly confused is the deteriorating state of political and economic affairs, that for whatever reason, markets seem to be ignoring.

    As a point of reference, just a few of the obvious factors: The US government has been shut down for about a month now, and last week, John Williams, president of the New York Federal Reserve warned “that it is hitting our economic growth”.

    In Europe, the Brexit situation has moved into the ‘Twilight Zone’, and the clock is ticking on a very uncertain outcome. The news from China points toward further weakness, despite a record $83 billion being injected to boost their economy, and no substantive progress has been made on trade talks.

    Nevertheless, global equity markets are rising, and not in a small way. Since the year began, the S&P 500 is up 6.5%; the Shanghai Composite has climbed 4.1%; Germany +6.1%; Japan +3.3%, and Brazil is up 9.3%.

    Further, The Copper Journal’s BRIC Index has risen to a record high, and it is a pretty good indicator on the direction of copper prices. If you would like a copy, just send us a note.

    So, as we said last week, and the week before, we remain cautiously optimistic. 

    One last thing – the January / March back in copper on Comex widened to 2.20¢ on Friday from 75 points last week, and along with rising prices, open interest has risen by about 30,000 contracts since the month began.