LONDON: Copper prices fell on Monday to one-month lows as the prospect of a debt default at China property developer Evergrande Group fuelled a sell-off across financial markets and investors headed for the safe haven dollar.
Benchmark copper on the London Metal Exchange was down 2.5% at $9,079 a tonne at 1115 GMT. Prices of the metal used widely in the power and construction industries earlier touched $9,052.50 a tonne, the lowest since Aug. 20.
"Copper prices are falling in sympathy with risk-off trading and weak sentiment because of Evergrande," said Giles Coghlan, analyst at broker HYCM.
"It is a concern in the short term, but I don't think it is going to be another crisis like Lehman's because of the high level of down payments you need to make in China for property."
RISK-OFF: Evergrande has been scrambling to raise funds to pay lenders, suppliers and investors, with regulators warning that its $305 billion of liabilities could spark broader risks to China's financial system if not stabilised.
Copper drifts lower as focus turns to US Fed meeting
DOLLAR: A higher U.S. currency makes dollar-denominated commodities more expensive for holders of other currencies, which would subdue demand.
TECHNICALS: Strong support for copper around $9,060, where the 200-day moving average sits has been tested, but traders expect it to hold for now. The first upside barrier comes in at around $9,380, the 21-day moving average.
NICKEL: Prices of the stainless steel metal slipped as traders shrugged off the idea of Indonesia imposing export taxes on products with less than 70% nickel content to drive expansion of the country's domestic processing industry.
Nickel was down 2.1% to $18,945 a tonne.
STOCKS: Nickel prices are expected to be supported by falling stocks of the metal in LME registered warehouses
OTHER METALS: Aluminium was down 0.5% at $2,869.5 a tonne, zinc fell 1.6% to $3,038 a tonne, lead ceded 0.7% to $2,166 and tin lost 0.8% to $33,850.
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