Copper prices have recently climbed by approx 10% in two weeks. Why? Many comments are available and many are viable so I will share my perspective and let you the reader decide whether or not my comments today are valuable.

We have seen a general trend downward in the US Dollar as it has fallen recently again several major currencies specifically the EURO. A result of the US Fed pumping billions of $$ into the system. Additionally, we have seen a shift in copper demand in China. China has been stockpiling copper in increasing amounts making one wonder if they see commodities as a better investment than US ‘T’ bills.

However, in spite of the above comments speaking to reasons for a rise in copper. factors remain pressuring future copper prices down. The Exchange Warehouse inventories though having declined, current levels remain comfortable and are not seen as worrisome with the LME at 303,200 tons and COMEX up to 56,814 short tons. When one considers the massive stockpiling by China and continued bad (as opposed to bad, BAD!) economic data coming out; it hardly seems likely that there is a near term shortage of copper. So why the climb?  Could it be investor driven?

ABC Metals continues to maintain a secure supply base, maintaining a multi-faceted channel for the purchase and supply of copper and copper alloy products to our Supply Chain partners. Our strategies shield our customers from much of the downside risk associated with a volatile commodity market. You can be confident that we will maintain your supply of metal during the gyrations of our current economic storm. Give us a call and ‘Uncoil the Power’ of ABC Metals.

Metal prices closed higher yesterday following a sharp rally in the price of crude oil; near $66 bbl. The dollar also weakened adding to the commodity movement.  Economic data out of the US was mixed yesterday as Durable Goods order rose a nice 1.9% in April, but prior numbers were revised down.  New Weekly Jobless claims data did not surprise, but continuing claims rose; an indicator of how quickly the unemployed are finding jobs or rather not finding jobs.

China’s economy is expected to expand by 7.5% this year up from a 1st Qtr of 6.1%. It appears China’s massive stimulus plan is having some positive effects. Its stimulus strategy is much different than the US with their plan being front-loaded. Thus the near term positive effects are not unexpected. As for the long term.. time will tell.

As of this writing, the author of this blog continues to look in vain for the ‘green shoots of recovery’ spoken of by Fed Chairman Bernanke in the labor and housing sectors. Still, it seems we have pulled out of the economic dive we were in…for now we seem to be ’skimming the treetops.’  No room for error as companies endeavor to avoid a financial crash. I would really like to get some room…altitude between me and the ground right now. Also known to some as a recovery.

Initial opening numbers in the metal markets indicate a gentle nudge higher today. Stay current by visiting our website @ www.abcmetals.com.

Since we broke out of the $1.40-$1.60/lb COMEX trading range we have seen Copper brush $2.20/lb. Published comments regarding, ‘Why?’ point to a seasonal spring rally, improved sentiment and results in the financial sector, and Chinese policy practices of hedging their dollar portfolio by commodity conversion.  Lastly, rumors of Chinese restocking of strategic reserves has fueled the current spike in the metals market.

In spite of the current Copper uptick, there is concern here at ABC that prior (weeks old) dismal commodity price forecasts remain hard to dismiss. We likely will see these current prices fizzle by late summer. Still, the new average price will be higher as the Global Economy improves.

Aluminum prices are depressed. While Carbon Steel, Stainless, and Aluminum scrap prices remain low and flat.