Industrial Metals Savaged, Copper has Worst Quarter on Record
Oct 7th, 2008 | By Doug Casey | Category: Financial News, Gold MarketThe base metals were all in the red on Monday. Copper was off sharply pre-dawn, rallied at the beginning of the New York day, but then fell again to finish at its intraday low of $2.5478/lb., down nearly 13 cents from Friday. Nickel was down consistently throughout the day, closing at $6.8697/lb., down 51¾ cents.
Zinc was also steadily down, ending at $0.7208/lb., down nearly 3¾ cents. Aluminum was weak, falling below the $1 mark, to $0.9924/lb., down more than 4 cents, while lead got pummeled, to $0.7239/lb., down 5 cents.
Copper plummeted to a 19-month low below $2.50 as concerns about falling demand in a global recessionary environment stampeded traders into further liquidations in the red metal.
Copper finished its worst quarter on record on September 30, losing 26%.
“There’s a lot of concern about future demand, given the slowing pace of economic activity and as the credit crisis spreads globally,” said Matthew Zeman, a trader at LaSalle Futures Group in Chicago. “The prospects for copper aren’t looking good.”
The selloff remains general. Commodities as a whole have fallen as investor confidence plunges and traders exit leveraged bets. The Reuters/Jefferies CRB Index of 19 futures contracts has fallen 25% in the three months ended September 30, its worst quarter since at least 1956, and dropped 10% last week, the most in more than 50 years.
“The evidence of a risk-averse attitude is clearly out there,” said John Wilson, chief market technician for Morgan Keegan, of Memphis, Tennessee. “We’ve seen people pulling out of these markets in huge numbers. That’s the face of fear. We could be heading for some major low in the markets. At this point, people don’t want to hold commodities.”
Accordingly, UBS lowered its copper forecast to $2.50 for 2009, down 38%.
Source: Industrial metals savaged - Copper has worst quarter on record
Advertisement
The global derivatives market has soared from just over $1 trillion to a staggering $272 trillion, according to the Bank of International Settlements.
What's more disturbing, is that nearly 1/3 of these derivatives are concentrated in the hands of just 3 American banks.
The scamble to deleverage has blown these banks' delicately balanced derivatives portfolios off their axis. World markets are now teetering on the brink of an unprecedented collapse.
But you can protect your portfolio - and potentially reap huge gains - by accessing "secret" financial opportunities that are set to soar when the derivatives bubble bursts...Click here to read more.
Doug Casey is a contrarian investor, sought-after public speaker and author of several books. His work "Crisis Investing" held the position of # 1 bestseller on the New York Times list for 26 consecutive weeks. Doug's unusual views on the economy - and just about everything else - have gained a huge following in the investment community, and it certainly helps that his stock recommendations of undervalued junior exploration companies have made his subscribers millions. Now in its 27th year, Doug's monthly newsletter, the International Speculator, is one of the most established and esteemed publications on gold, silver and other natural resource investments. Together with the Casey Energy Speculator, it covers a broad range of carefully selected stocks with the very real potential of double- and triple-digit returns within 12 to 24 months.