Copper dips as global volatility shakes investors' confidence

Copper prices fell on Monday amid volatile global markets ahead of the US presidential election in November and the lack of participation from top consumer China during a holiday.

"Uncertainty related to the US election can keep prices volatile. What change we are seeing currently is the shift away from Chinese-led growth price rally, as most of the positive surprises related to China are largely priced-in," said ANZ analyst Soni Kumari.

"Any disappointment on the US fiscal package remains the downside risk," Kumari said, adding that recent build-up in LME stocks and plunging spot premiums in China along with a broad sell-off in risk assets had weighed down copper prices.

Three-month copper on the London Metal Exchange declined 0.6pc to $6,512 a tonne by 0726 GMT. The contract hit a seven-week low on Friday at $6,269 a tonne.

"The reality is that until China returns, we are short of the major player in global metals and that is always going to be dangerous," said Kingdom Futures director Malcolm Freeman in a note.

But prices were cushioned by looming labor strikes in Chile, the world's top copper maker, while the red metal could also benefit from a $2 trillion clean energy plan if US Democratic presidential candidate Joe Biden wins, Kumari added.

Chile's copper production fell 6.2pc year on year to 481,700 tonnes, however, the January-August output of 3.78 million tonnes was up 0.4pc.

FUNDAMENTALS

LME zinc dropped 0.8pc to $2,308 a tonne, aluminium declined 0.3pc to $1,763.50 a tonne, while nickel was down 0.4pc at $14,360 a tonne.

An Indonesian nickel smelting project being built by China's Tsingshan Group and partner companies to produce battery-grade chemicals has withdrawn a request to dispose of waste in the ocean, a government official said on Friday.