By Glenys Sim
Oct. 2 (Bloomberg) -- Copper may decline as the ratio between copper and aluminum prices holds “bearish seasonal tendencies”, said Barclays Capital.
“For five consecutive years this ratio has dropped in October,” the bank’s analysts, led by global head of technical strategy Jordan Kotick, said in a report e-mailed today. The ratio was around 3.23 today, according to Bloomberg data.
“With the ratio itself failing to surge meaningfully above its summer peak, the risks into year-end are for copper to underperform and for the ratio to dip back to 3.00-3.05, below which would confirm a more significant top,” he said.
Copper for delivery in three months has almost doubled this year on the London Metal Exchange, and traded at $5,960 a metric ton at 9:49 a.m. Singapore time. Three-month delivery aluminum has gained 20 percent, and traded at $1,845 at the same time.
“When comparing median returns in the fourth quarter for copper and aluminum, copper consistently posts lower returns,” said Kotick.
In a sample of seven securities including spot gold and the Reuters/Jefferies CRB Index of 19 futures, copper historically has the lowest median return, with October being the worst month of the year for the metal used in construction and automobiles, Kotick said in a separate report dated Sept. 30.
Historically, copper’s average return in October is -1.4 percent and its median return is -2.49 percent, according to Kotick, who used monthly closes to calculate returns. This compares with aluminum’s average return of -0.5 percent and median return of 0.83 percent.
Last year, copper fell 36 percent in October while aluminum declined 16 percent in the same period, according to Bloomberg calculations.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
Posts
No comments:
Post a Comment