LONDON: Copper fell on Thursday, extending losses after its biggest one-day drop in 20 months to head towards its April lows, as rising inventories, worries over cooling demand and a bounce in the dollar all weighed.
Inventories in London Metal Exchange warehouses rose nearly 33,000 tonnes on Wednesday, exchange data showed, bringing their increase this week to 64,000 tonnes, or 25 percent.
That followed data this week that showed US factory activity slowed in April, while growth in China's manufacturing sector slowed more than expected.
"We're seeing weaker manufacturing data this week, especially in China and the US, which is affecting base metals negatively, and I sense the market is starting to lose patience with the lack of progress on Trump's infrastructure spending plans," Danske Bank analyst Jens Pedersen said.
"Producers have been caught off guard by this slowdown in the industrial cycle, and therefore are having to place (metal) in inventories."
A bounce in the dollar after the Federal Reserve played down any threats to this year's planned interest rate hikes, solidifying expectations of another move in June, pressured commodities across the board, meanwhile.
LME COPPER: LME copper was down 0.5 percent at $5,570 a tonne in official midday trading, having hit $5,542, its lowest since April 19. Prices on Wednesday recorded their biggest one day drop since Sept. 2015, shedding 3.5 percent.
LME STOCKS: LME copper stocks surged by 31,250 tonnes, data on Wednesday showed, while tin stocks fell another 35 tonnes to their lowest since 1989. Tin, untraded in official rings, was last bid at $19,925 a tonne, up 0.2 percent.
LEAD STOCKS: One company was holding more than 90 percent of lead warrants and cash contracts . Cancelled warrants, or material earmarked for delivery, unavailable to the market, made up nearly half of total inventories.
LEAD AND ZINC: LME lead and zinc were untraded in official rings, but were last bid 1.5 percent lower at $2,170 a tonne and down 0.4 percent at $2,565 a tonne, respectively.
TECHNICALS: LME copper may retest support at $5,563 a tonne, a break below which could cause a loss into the range of $5,433-$5,508, Reuters technical analyst Wang Tao said on Thursday.
GLENCORE: Mining-trading group Glencore Plc has hired the Bank of Nova Scotia to sell a portfolio of royalty assets, including one for the Antamina copper-zinc mine in Peru, four people familiar with the process told Reuters.
PHILIPPINES MINING: The Philippine government will move forward with a second review of the country's mines despite the removal of Regina Lopez as environment minister, a finance official said on Thursday. However Lopez will no longer be in a position to suspend around 8 percent of global nickel supply, Goldman Sachs said in a note.
OTHER METALS: LME nickel, untraded in official rings, was last bid 2 percent lower at $9,050 a tonne. Aluminium was down 0.4 percent in official trading at $1,916.50.
Comments
Comments are closed for this article.