On the LME markets, Copper and Aluminium are fairly steady as with ongoing strikes at the world major copper mines keep a floor on the price.
The AUD/USD is currently trading at 77.3 up from 75.8 last week
* * * Houston, 20 March (Argus) ˜ Comex Cu: Price drops with oil * * *
The Comex copper price dropped on Monday as traders took profits following a six-day rally and crude traded lower.
WTI crude was trading 0.8pc lower at $48.39/bl midday as increased US drilling erodes the Organization of Petroleum Exporting Countries (OPEC) output decreases. Rising output and near record stockpiles in the US are weighing on crude and, in turn, copper metal. Crude and copper tend to move in tandem as they are traded in the same baskets.
The price improvement Comex copper recently received from strikes at two major South American mines and a supply disruption in Indonesia may have been fading out gradually as demand remains quiet and London Metal Exchange (LME) Inventories are higher than they were the start off the year. LME Inventory levels are 6.8pc higher for the year while Comex stockpiles, where less than half the size of LME inventories, they are up over 54pc for the year. Shanghai Exchange warehouse stockpiles are up 90pc since the start of the year. Copper is still readily available despite the disruptions.
BHP Billiton looked as though they were moving towards the union’s demands to resolve the dispute that has given copper strength since a strike began on 9 February at Chile’s Escondida mine. BHP Billiton upgraded their first offer to address strikers’ concerns, but the union rejected BHP Billiton’s most recent offer over the weekend.
Supply disturbances at the Escondida mine in Chile and Grasberg in Indonesia (the world’s two biggest copper mines), have started their sixth week. At the same time, workers at Cerro Verde (the largest mine in Peru), began their second week of strike.