Comex copper price surges higher, breaks technical rersistance

The Comex copper price hit a one-month high on Thursday January 12, having being mired in a tight range over the last week.

Copper for March delivery on the Comex division of the New York Mercantile Exchange climbed 4.10 cents or 1.6% to $2.6515 per lb. Earlier this morning, the contract peaked at $2.6595, its highest since December 11. 

Copper benefits from supply concerns

• Throughout the week, strong US and Chinese data has prevented metals from selling off.
• Consumers are also beginning to restock, with inventories in LME-listed warehouses falling a net 2,525 tonnes to 285,700 tonnes.
• “Signs of a developing top in copper are starting to surface but sharp declines in the dollar, ongoing declines in LME copper stocks and news that China’s November scrap copper imports managed a year-over-year gain of 8% should cushion the market against a wholesale washout in prices,” The Hightower Report said in a daily note. 
• And continuing contract negotiations at Chile’s Escondida mine, the world’s largest open-pit copper mine, hint at more disruptions in 2017 after a quiet 2016.

Economic data and currency moves

• US unemployment claims between December 29 and January 5 at 247,000 were below the forecast of 266,000. 
• Import prices in December disappointed at a 0.4% gain, missing expectations of a 0.8% rise. 
• Later today, the release of natural gas storage figures and a 30-year bond auction are scheduled. 
• The central bank of China recently set the yuan middle rate against the US dollar at 6.9141 on Thursday, slightly stronger than Wednesday’s 6.9235. 

LME technical issues

• LMEselect was out of service for several hours this morning due to a connectivity failure that prevented trading. 
• Asia-based traders were frustrated by the inability to trade, while the exchange’s telephone helpline also crashed during the outage, which only added to the exasperation. 
• “The closure could have caused an issue if you had stops in and you couldn’t do anything about them – there could be consequences but I have yet to hear of anyone being badly burnt,” an LME trader said. 

(Editing by Mark Shaw)

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