MEIR ON METALS: Metals a touch steadier as investors watch European yields slip

Apr 11, 2012 | 11:03 AM |

Analyst Ed Meir looks at what is moving the metal markets on Wednesday April 11. Copper and General Commentary: Metals were walloped on Tuesday, with copper falling to a three-month low and taking out key bottom-of-the range support at $8,150. There were broad declines in the rest of the LME group as well, along with heavy selling in a host of other commodity markets, except for gold and silver, both of which took on the “flight-to-safety” role alongside the US dollar and a surprisingly resurgent yen. We were not surprised by Tuesday’s downside move in copper, as the various props that have been holding up the market over the last few months are now starting to wobble. Most significant is the recent turn in LME stocks, which have now actually risen by about 8,500 tonnes over the past four days, coinciding with a similar rising trend in last week’s Shanghai figures. More importantly, concern about overall Chinese demand is growing, with the trade numbers out Tuesday doing little to assuage these fears. Although copper imports were decent, the rise in local Chinese copper stockpiles, coupled with softer premiums, suggest that a good portion of this metal is being channelled into stockpiling arrangements as....