BEIJING: Base metals prices dropped across the board on Tuesday, with benchmark London copper extending a sharp drop from the previous session, after economic growth in top metals consumer China slowed to its weakest in 28 years.
Trading volumes were thin ahead of the upcoming Lunar New year holiday, which will see China shut down for a week.
"The real challenge for the space right now is there's no real impetus for anyone to do anything," said Guy Wolf, global head of market analytics at brokerage Marex Spectron, who noted that positioning across the complex was "pretty flat" except for a sizeable short position on aluminium.
"Chinese New Year always has this effect because you know it's a period of softness," said Wolf, who expects further stimulus measures to be announced by Beijing after the holidays.
FUNDAMENTALS
* LME COPPER: Three-month copper on the London Metal Exchange was down 0.4 percent at $5,958.50 a tonne, as of 0725 GMT, after ending down 1.2 percent in the previous session.
* SHFE COPPER: The most-traded March copper contract on the Shanghai Futures Exchange closed down 0.9 percent at 47,530 yuan ($6,983.34) a tonne, snapping four straight days of gains.
* OTHER METALS: Zinc, which was the worst performer in the London base metals complex last year, fell as much as 1.4 percent to $2,552 a tonne. Nickel shed as much as 1.5 percent to 11,620 a tonne, the lowest since Jan. 3.
* ZINC SPREADS: The premium for cash zinc over the three- month price <CMZN0-3> was at $8.50 a tonne, having tightened from $125 a tonne in early December. "It's been a bit head-scratching how poorly zinc has performed in terms of outright price, when you consider how tight the curve structure got," Wolf said.
U.S.-CHINA: The United States will proceed with the formal extradition from Canada of Huawei executive Meng Wanzhou, Canada's ambassador to the United States told the Globe and Mail, in a move certain to ratchet up tensions with China.
* WAREHOUSING: Years after sweeping reform aimed at eliminating logjams in warehouses that collect rent for storing metal, a firm is preventing companies from getting material when they need it from a Malaysian port, five sources close to the matter said.
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MARKETS NEWS
* Asian shares stumbled and oil prices fell on Tuesday as pessimism about world growth drove investors away from risky assets, while sterling ticked lower in the face of the latest twists and turns in the Brexit saga.
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