Network Metals LLC

It seems to be more of the same today, as copper continues to fall and the other base metals mostly follow suit (although copper stabilized at the end of trading). Copper’s fall over the last three days has been its worst in ten weeks, and if overall sentiment is any indication we will see more correction in the copper price. We are still seeing a lack of copper scrap contributing to overall copper demand, but the scrap shortage is, as we’ve said, due to a lack of production and not to an increase in consumption. Copper’s run over the last two months has raised the price dramatically and cosmetically reduced LME inventories, but the majority of the primary metal has not been consumed; we believe most analysts will come to agree that the overall fundamentals have not changed enough to signal a recovery. A Chinese official yesterday said that ‘overcapacity in the steel and automobile industries in China is one of the country’s biggest concerns’, and we suspect that it will take indicators like that to change before actual metals demand can pick up.