dinsdag 19 februari 2013

Update: Copper Contango Experiment

There is no stopping of the increase in contango in copper. So don't expect a correction in copper price soon. Probably the stock market can still go up for a little bit, due to this expansion of the balance sheet of the Federal Reserve.

Chart 1: Copper Contango

3 opmerkingen:

  1. The price of Copper has decreased from $3.79/lb at 31-Jan-13 to $3.65/lb on 20-Feb-13 as LME & COMEX inventory remain high.

    The Contago indicates that expectation that Copper prices will rise on the expectation that Chinese demand is increasing, but until such time as copper inventory starts to fall, the recovery in prices may not happen in the next month...

  2. As at March 4th, the price of Copper has fallen further to $3.48/lb, while LME & COMEX inventory are still rising, and concerns about sluggish economic recovery in China have reemerged.

    The normal course of a futures contract in a market in contango is to decline in the cash price for immediate delivery, especially where there is an inventory overhang, rather for the cash price to increase as you have suggested.

    1. Indeed, active shorters have come to the copper market as KWN reports. I wonder if the stock market will follow with this decline. And what will the contango report tomorrow give?