How Copper, Gold, and Silver Performed on May 25
Copper inched higher on Wednesday, May 25, 2016, due to surging oil prices and the weaker US dollar.
Due to better-than-expected US homes sales data released in the morning, copper surged higher on Tuesday.
The average weekly price of MOP (muriate of potash) in Vancouver remained unchanged for the week ended May 20, 2016.
Phosphate rock prices remained unchanged during the week ended May 20, 2016.
A rise in fertilizer inventory levels indicates that the fertilizer supply is outpacing the fertilizer demand.
MAP (monoammonium phosphate) is the second-most used phosphate fertilizer after DAP (diammonium phosphate).
Ammonia is used to make phosphate fertilizers such as DAP (diammonium phosphate) and MAP (monoammonium phosphate).
Coal prices, like natural gas prices, have hit a low point due to the low demand and excess supply imbalance.
Natural gas is the key raw material for the production of nitrogen fertilizers such as ammonia and urea.
As most global ammonia production is upgraded to urea, ammonia prices may affect urea prices.
In the week ended May 20, 2016, the US domestic market (XLB) saw mixed price movements for ammonia.
Because fertilizer prices are the biggest factor impacting the performance of fertilizer companies, investors must track fertilizer prices regularly.
Although Freeport-McMoRan (FCX) isn’t a major gold producer, it expects its gold production to rise to 1.8 million ounces this year, a year-over-year increase of 44%.
since China doesn’t seem to be in any rush to buy excess copper, the red metal could continue to trade in an even more range-bound channel.
The falling trend in SHFE copper inventory suggests that Chinese copper imports could be subdued in May as well. Chinese copper imports are a key driver of copper prices.
As the Chinese currency gradually appreciated this year and Fed rate hike expectations started to fade away, we saw bonded copper stocks rise again in China.
Analysts see copper prices as a reflection of the global economy. This is due to copper’s diverse end use, and thus it has been dubbed Dr. Copper.
In this part of the series, we’ll see how US copper demand is playing out. The United States is the second largest copper consumer, accounting for 9% of global copper consumption.
Since China (PGJ) is the largest copper consumer, it’s important for investors to keep track of Chinese copper demand indicators.
Copper prices resumed their downside in May after remaining relatively strong in April. So far in May, the LME three-month copper contract has fallen 8.5%.