Copper, iron ore futures gripped by “panic selling”

Markets are not enjoying the China data. From the SMH blog:

Shanghai copper has dropped by its 5 per cent daily limit to its lowest in more than four years after weak Chinese trade data fanned concerns over its metals industry following the country’s first domestic bond default last week.

The most-traded May copper contract on the Shanghai Futures Exchange has plunged 5 per cent to 46,670 yuan ($US7600) a tonne, its lowest since September 2009.

On the Comex in New York, copper futures for delivery in May slid as much as 2.8 per cent to $US2.9955 a pound, the lowest intraday level since June 25, and last traded at $US3.0205 in Tokyo. The metal fell 4.2 per cent on Friday, the biggest drop since December 2011, and dropped 3.3 per cent last week.

‘‘It’s a bit of panic selling on concern that China’s demand is slowing,’’ said Kazuhiko Saito, a Tokyo-based analyst at commodities broker Fujitomi. ‘‘China is driving industrial metals lower.’’

Remember that Dr Copper, a proxy for global demand, is sitting right on the very key technical level at $3:


Dalian iron ore futures are also limit down at 755 or minus 3.9%:


And rebar future are down almost as far…

Houses and Holes
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      • So MJV, can you please explain The Kouk’s thinking. The weightings in the CRB have little relevance to Australia, so why even quote it? Or does he believe if some commodities are rising, all commodities will follow? Rising tide lifts all boats etc.

      • I’ve mentioned the lack of relevance to Oz numerous times and he’s just ignored me. (Which is fine because I mainly interact with him for my own amusement.) I have seen him tell someone else that he thinks it’s a good general barometer for the world economy. But that’s a pretty limp argument. Honestly I think with guys like that, they believe that spin matters in economics. If iron ore and coal are both being slaughtered and you keep repeating a line about an irrelevant commodity index rising, you’re able to convince some people for a little while longer that your hyperbull thesis remains intact. But in the end those guys all end up mugged by reality. Now reality has well and truly come a-knocking.

        He reminds me of Chemical/Comical Ali, bellowing about beating back the crusaders even as American artillery was exploding in the background. The Kouk be insisting on imminent rate rises right up until the first tuesday of whatever month the RBA cuts. Then he’ll tell his hapless fan club why it’s a catastrophic mistake.

  1. migtronixMEMBER

    AUD shrugs it off but NKI225 is off 1% on pretty terrible GDP and Current Account numbers.

  2. Where to for Chinese industrial production? In the absence of officially-guided spending, the private sector is both unlikely and is in any case too small to take up the slack.

    The market clearly does not believe the growth targets set at the current parliamentary session will be met.

  3. West Australian Treasurer Troy Buswell has resigned after having a breakdown – snip.

    skippy… canary’s in mine thing???