Precarious... May 24th, 2019 by John Gross

Most metals lost more value last week, weighed down by ongoing trade issues, military threats, and an overall sense of uncertainty, that is disrupting supply chains throughout the world.

Unfortunately, there is little light to be seen at the end of this tunnel, which seems to be considerably longer than expected.

A review of just about every chart in this report shows markets having broken previous support lines, with new lower levels now being tested.

The exception of course is the dollar, which continues grinding higher, and is another contributing factor to keeping prices in check.

The conundrum we are facing is found in the contradiction between the fundamentals being supportive for metals, which is being completely overwhelmed by negative sentiment.

To further illustrate this point, our friends at the International Copper Study Group are forecasting that global production of refined copper will increase 670,000 mt, or 2.8% to 24.780 million mt during 2019, while consumption is expected to rise 460,000 mt, or 1.9% to 24.970 mmt, resulting in a deficit of some 190,000 mt. This follows a 400,000 mt deficit during 2018.

At the risk of repetition, at some point, market forces will have to recognize this growing disparity.

Regards,
John

---

View Charts (PDF)

---