LONDON: Copper prices tumbled to 11-month lows on Monday as China’s property crisis, receding hopes of stronger stimulus in the top consumer of industrial metals and the conflict in the Middle East hit sentiment.
Benchmark copper on the London Metal Exchange (LME) was down 0.9% at $7,875 a metric ton at 0945 GMT. Prices of the metal used in the power and construction industries earlier touched $7,856, the lowest since Nov. 28.
Traders said industrial metals were also taking their cue from China’s blue-chip stock index dropping to 4-1/2-year lows and that higher copper inventories in warehouses monitored by Shanghai Futures Exchange were also weighing on copper.
“Metals are under pressure for reasons which include China property and demand and the what looks to be an escalation of the conflict in the Middle East,” a metals trader said.
Fears that the Israel-Hamas war could mushroom into a wider Middle East conflict rose on Sunday with Washington warning of a significant risk to U.S. interests in the region as ally Israel pounded Gaza and clashes on its border with Lebanon intensified.
China’s economy growing at a faster-than-expected pace in the third quarter and industrial activity surprising on the upside suggest further measures to boost growth may be shelved.
Also undermining sentiment are rising copper stocks.
In LME registered warehouses they ended last week at a two-year peak, while those in warehouses monitored by the Shanghai Futures Exchange (ShFE) rose for the second week consecutive week.
Elsewhere, large holdings of lead warrants and cash contracts have fuelled worries about availability of the battery metal in the LME system. This can be seen in the premium for the cash over the three-month lead contracts.
Weighing on industrial metals overall was the higher U.S. currency, which when it rises makes dollar-priced metals more expensive for holders of other currencies.
Three-month aluminium was down 0.7% at $2,166 a ton, zinc fell 1.7% to $2,395, lead retreated 0.9% to $2,083, tin slipped 0.6% to $24,830 and nickel ceded 0.7% to $18,435.
Comments
Comments are closed.