Shanghai Futures Exchange copper tumbled 3.7 percent to 40,730 yuan ($6,560) a tonne on Monday in its biggest daily fall since January, concerns deepened over the health of China and the eurozone economies. ShFE nickel slumped limit down, before closing slightly off its lows, and dragging LME nickel down 3 percent. ShFE zinc, lead and tin fell between 2-3 percent while ShFe aluminium finished down 1.5 percent having struck a new contract low.
The heavy selloff that ensued saw copper futures in London and Shanghai hurtling down more than 4 percent, reflecting increasingly negative sentiment towards China's economy near term, an analyst at a Shanghai-based merchant said. "I don't think it has a lot to do with margin calls. Big players take their variation margins very seriously and they are well financed. Today's open interest has increased (on ShFE) but I think that's based more on a negative macro economic view." "I am still bearish on metals near term. The PBOC (Chinese central bank) and Beijing's moves at the weekend sheds a bad light on the economic outlook," said an analyst at a hedge fund in Shanghai.
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