Typically, May 1st refers to and celebrates the arrival of Spring, and is also a day to honor those of the working class, with markets closed in much of the world.

The alternative interpretation is Mayday, which is recognized as an international distress call.

Although we set out to discuss how the markets fared during April, our attention was riveted to the debacle in metal markets as they fell precipitously on May 1st.

What caused the sudden downdraft? Who knows? Could be the strong and rising dollar; still unresolved trade issues; a weaker than expected ISM Manufacturing report, or the significant increases of metal going into warehouses, with the sheer size of ‘deliveries’ causing shock and awe.

Last month we addressed the sizeable arrivals of copper into LME warehouses around the world within days of each other. Now we see another 36,325 mt of copper ‘arriving’ on April 29th, along with 48,200 mt of aluminum. But there is more to come – as 158,575 mt of aluminum was added between April 30th and May 2nd. Thus, LME inventories of aluminum rose 206,775 mt, or 20% in just 4 days.

Mayday indeed. There is something seriously wrong with the system that needs to be fixed.

In any event, some real damage was done, as markets that were rising, are now falling, with support lines broken, and important trends under attack.

Where we go from here is anyone’s guess, and we suspect it will take some time for markets to regain their footing.

In the meantime, we are working on a presentation of the global copper market for The Wire Association International, to be delivered at the Interwire Convention, being held in Atlanta May 13 – 16, 2019.

Did you know that nearly 75% of refined copper consumption goes into wire & cable products?

Hope to see you there.

Regards,
John E Gross

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