The CDU chart was setting up nicely for a golden cross after the...

The CDU chart was setting up nicely for a golden cross after the expected Fib retrace from the spike to just under $2 but the macros are now coming into play big time - Resource stocks in general are on the nose with plenty of sector rotation into safe havens going on . Dr Copper is signalling taht the recent bull market in Yank land was an orchestrated bubble fueled by their shale oil reserve discoveries and continual stimlus through maxing out the credit card printing money to prop up the stock market .


DJ Copper Prices Suffer Biggest One-Day Decline in Over Three Years
15/01/2015 06:26AM AEST
By Ira Iosebashvili And Ese Erheriene

Copper prices suffered their biggest one-day decline in over three years Wednesday, reflecting mounting concerns among investors about the health of the world economy.
The bulk of Wednesday's losses occurred during Asian trading hours after the World Bank cited concerns over a "disorderly slowdown" in China and cut its outlook for global growth in 2015.

The red flags in the World Bank's report hit copper hard because the metal is used across a wide swath of industries, from smartphones to automobiles, making it a popular economic barometer for many investors. China also looms large in the market as the country is by far the biggest copper consumer. Even a small decline in Chinese demand can leave the market swimming in metal and send prices tumbling.

Copper for March delivery ended down 5.2% at $2.5055 a pound on the Comex division of the New York Mercantile Exchange, the lowest closing price since July 2009 and the biggest percentage drop since October 2011. Copper is now down 11.3% this year, the steepest decline among commodities after oil and refined products.

Many investors fear plunging copper prices are a harbinger for a worse-than-expected slowdown in China, the world's second-largest economy. That, along with the relentless decline in oil prices and the potential for a recession in Europe, has spooked financial markets, sparking a selloff in U.S. stocks this week and sending investors to seek safety in Treasurys and gold.

"The dumping of copper is saying that the world economy is not on a stable footing," said Ira Epstein, a broker at the Linn Group, a commodities-trading firm based in Chicago. "This is the sign of a global issue."

Copper traders and analysts were already expecting a global surplus of the metal this year, the first since 2009 and the largest since 2001. World production of refined copper is expected to exceed demand by 390,000 tons in 2015, the International Copper Study Group said in December.

The potential for a glut has weighed on prices for months, with futures falling 12% in the second half of 2014. However, the selling intensified this week, with investors dumping copper as part of a general move out of commodities driven by plunging oil prices.

After falling sharply on Monday and Tuesday, selling in Asia on Wednesday appears to have been driven in part by investors who opted to unwind bets in the copper market to prevent further losses, traders said.

Copper fell below $6,000 a ton on the London Metal Exchange on Tuesday, a psychologically important level. Copper for delivery in three months ended down 5.3% at $5,548 a ton on the LME. Industrials metals across the board fell. Aluminum hit a seven-month low and was recently down 0.4% at $1,783.75 a metric ton; nickel traded at $14,560 a metric ton after hitting an 11-month low earlier in the day. Lead hit a 2 1/2 -year low and fell 3.4% at $1,766.50 a ton.

Mining and metals stocks also declined sharply Wednesday. Bearing the brunt of the selloff was Glencore PLC, the world's third-biggest copper miner and largest supplier of the metal which also depends on commodities trading for its profit. Its shares fell 9.3% in London trading. Mining companies Anglo American PLC fell 9% and BHP Billiton PLC, 5.3%, and Rio Tinto PLC, 4%.

Not everyone is convinced the selloff is warranted. One potential turning point for copper is the Lunar New Year on Feb. 19, as demand traditionally starts to pick up in China after the holiday lull, investors said.

Some investors believe supply in the copper market will be tighter than expected next year, as the industry maxes out production at many of the world's easily accessible mines, making it more difficult to bring product to the market.

Copper's nose-dive is also likely to force companies to cut production, investors said. About 20% of the world's mined-copper supply is unprofitable when copper prices are at $2.50 a pound, said Charl Malan, senior metals and mining analyst with Van Eck Global Hard Assets fund, which had $3.3 billion in assets at the end of 2014.

"There's a big probability that current production gets cut and that new projects, that are supposed to deliver a 5% supply growth in 2016, will not happen," Mr. Malan said.
Mr. Malan said his fund holds no positions in the copper market.