Clearly Asian copper traders were disappointed with the on-hold stance from the US Fed chief yesterday. Copper prices overnight slid and that negative bias has remained in place into the early US Wednesday trade. However, it did seem as if the Fed was preparing to act and that they have been considering an array of easing tools and that has served to somewhat underpin physical commodity markets.
Adding into the negative track is news overnight of a double digit increase in copper production from BHP Billiton. With production at a very major producer jumping by 15% over the same quarter last year and by 11% over the prior quarter, the supply side news is an added element for the bear camp. In fact, LME copper stocks overnight also increased by 1,275 tons to stand at 252,900 tons and for some that might be considered a minor negative influence.
Apparently the Asian trade was tossing around the idea of rising Asian copper stock levels and in turn suggesting that trend was serving to keep physical buying restricted in the region. However, copper was given some support from news overnight of a recovery in Chinese Home prices, as that suggests the Chinese economy might be finding a bottom.
In looking forward, the copper trade expects to see a conflicted US report slate today, with housing starts and permits offsetting and the Beige Book thought to reconfirm a pattern of positive but perhaps weakening US economic activity.