Copper prices fell on Thursday after US legislation supporting protesters in Hong Kong increased concerns that a US-China trade deal would be delayed. Benchmark copper on the London Metal Exchange (LME) traded down 0.8% at $5,830.50 a tonne in official rings.
The metal used in power and construction has fallen about 20% from 2018 highs as the US-China trade dispute weakened global economic growth and metals demand. It touched a two-year low of $5,518 in September. The copper market is in deficit this year and may be again in 2020, said WisdonTree analyst Nitesh Shah. "But that's getting overshadowed by concerns on the demand side," he said.
Prices will remain volatile until Washington and Beijing give investors some clarity on their future trading relationship, he added. Completion of a "phase one" US-China trade deal could slide into next year, trade experts and people close to the White House said. Beijing is pressing for more extensive tariff rollbacks while Washington counters with heightened demands of its own.
Possibly complicating the trade negotiations further, the US House of Representatives on Wednesday passed two bills to back protesters in Hong Kong and send a warning to China about human rights. World stock markets slid further on Thursday and the US dollar weakened.
The global economy is growing at the slowest pace since the financial crisis, the OECD said on Thursday. Miner Freeport-McMoRan Inc and three Chinese copper smelters agreed a 23% cut in annual treatment and refining charges (TC/RCs) for 2020, pushing the industry benchmark to a nine-year low.
The fall reflects tight copper concentrate supply and increasing Chinese processing capacity. The global refined copper market saw a 330,000-tonne deficit in January-August compared with a 268,000 tonnes shortfall in the same period last year, the International Copper Study Group (ICSG) said.
The premium for cash aluminium over the three-month contract rose to $12,75, the highest since the start of the year, suggesting less nearby metal was available. Global primary aluminium output rose to 5.392 million tonnes in October from a revised 5.222 million tonnes in September, data from the International Aluminium Institute (IAI) showed.
The global market is "amply supplied", analysts at Commerzbank said, adding: "This is one of the reasons why we see virtually no upside potential for aluminium prices next year."
LME aluminium traded down 0.3% at $1,735 a tonne in official rings. Zinc fell 0.6% to $2,299; lead slipped 0.3% to $1,982; and tin rose 1.8% to $16,325. Nickel did not trade but was bid up 0.5% at $14,430 a tonne.
Comments
Comments are closed for this article.