Base metals prices fell on Wednesday, led by Shanghai aluminium, which closed at a near six-week low, as investors fretted over liquidity in China and awaited news from the US Federal Reserve's policy meeting. The most-traded August aluminium contract on the Shanghai Futures Exchange ended 1.5 percent down at 14,670 yuan ($2,290.79) a tonne, its lowest close since May 3. Shanghai copper closed down 0.8 percent at 53,530 yuan a tonne. Shanghai zinc closed down 0.7 percent, while nickel ended 0.5 percent lower and lead finished down 0.2 percent. Only London lead bucked the trend, edging up 0.2 percent.
Helen Lau, an analyst at Argonaut Securities in Hong Kong, said Shanghai metals prices dropped because of a lower-than-expected social financing figure in China amid an intensified crackdown on the country's shadow banking sector. "Markets are worried about whether there would be liquidity," Lau said.
China's total social financing (TSF), a broad measure of credit and liquidity in the economy, dropped sharply to 760.8 billion yuan ($118.80 billion) in May from 1.56 trillion yuan in April, central bank data showed on Tuesday. Democratic Republic of Congo state miner G?camines will drop legal proceedings to dissolve a copper and cobalt joint venture with a subsidiary of Glencore Plc after reaching a settlement with its partner that includes G?camines getting a $150 million payment.
Southern Copper Corp said on Tuesday that it plans to start building its proposed $2.5 billion copper mine Michiquillay in Peru next year and will likely start operations in 2022 - three years earlier than previously forecast.
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