Ashika Monthly Insight August 2016

AUGUST 2016
COMMODITY MONTHLY ROUND UP
“Look at market fluctuations as your friend rather than your enemy; profit from folly
rather than participate in it.”
- Warren Buffet
COPPER
Metal market is overall signalling that the world economy
is slowly coming out from the bad phase and also proving
to be resilient enough. Over the course of about four
weeks, since the U.K. voted to leave the European Union,
there was a failed coup attempt in Turkey and Donald
Trump bucked the establishment of the Republican Party
to become its presidential nominee. Rather than taking
these events as ominous signs, hedge funds are jumping
into the growth-dependent world of copper. The funds
and other money managers more than tripled their
wagers on price gains. Copper giant China which is the
main driver of copper and also for the world economy,
recorded all time high copper imports in its first half. The
country’s real-estate sector grew faster than the overall
economy in the second quarter. Construction accounts for
about 30 percent of global copper demand.
Copper mining companies and countries are projecting that
copper supply is not going to match up the future demand
speed and some money managers thus predicting a
fascinating rally is around the corner for copper. The huge
import from China is an indication for the money managers
that the country is securing its future demand.
Copper’s use as main input material for constructions, the
metal has earned the nickname Dr. Copper for its status as
an economic bellwether. Copper is best used as a
barometer for emerging markets, such as China. The surge
in the net-long position in NYMEX was a turnaround for
Weekly Chart: Copper COMEX Continuous
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