They’re getting worse.

The last Copper Journal report noted that the ISM Manufacturing Index for August had fallen below the critical 50 level indicating contraction, but the September reading was even worse as it fell to 47.8, its lowest since June 2009.

IHS Markit reports that manufacturing in the Eurozone fell to an 83 month low of 45.7 during September, while Germany, the world’s 4th largest economy saw its Manufacturing PMI drop to a 10 year low of 41.7.

And to make matters worse, while the US / China trade war continues, the United States, with the approval of the World Trade Organization will impose tariffs on a range of goods from Europe.

In response to weakening conditions, global equity markets have been in retreat, and there is little to suggest they will reverse to test recent highs.

As for copper, the monthly average came in at $2.5974, up 2.5¢ or 1% from $2.5724 during August, but was off 9.5¢, or 3.5% from $2.6923 last September.

The year to date average through September now stands at $2.7373, off 25¢, or 8.3% from $2.9860 during the first nine months of 2018.

For those who are statistically inclined, looking back over time, October has not been very kind to copper.

Since 1970, the October average price for copper fell 28 times, or 57%, from September, with an average loss of 8.0¢. Conversely, October was up 21 times, or 43% over September, with an average gain of 6.2¢.

And lest we forget October of 2008, when the global financial crisis was underway, the monthly average price of copper fell 96¢, representing the single largest monthly loss in 50 years.

Hopefully, this October will be more friendly.

Regards,
John E Gross

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