Industrial metals spent most of November trading sideways with concerns about demand being offset by tight market conditions, especially in aluminum and copper. Apart from two failed upside attempts in May and October, copper has since April stayed mostly rangebound not swaying too far away from its average price, at $9550 per tons in London and $4.35 per pound in New York.
During the past few months copper has performed relatively well considering heightened worries about the economic outlook for China, and more specifically its property sector which has seen near defaults as well as a slump in home sales. Additional headwinds have been created by the stronger dollar and central banks beginning to focus more on inflation than stimulus. In order to counter Chinese economic growth concerns, Vice Premier Liu He has been out saying growth this year should exceed targets, and the government plans more support for business.
High Grade Copper has been averaging $4.35 since April with the current action confined to a range between $4.2 and $4.5 while major support can be found in the $4 area. The lack of momentum in recent months has driven a sharp reduction in the speculative long held by hedge funds, a development that could trigger a significant amount of activity once the technical and/or fundamental picture becomes clearer.