LONDON: Copper prices came under pressure on Monday as economic data from top consumer China suggested slowing demand for industrial metals while inventories rose in warehouses registered with the London Metal Exchange (LME).
Benchmark copper on the LME was little changed at $9,725 a tonne at 1659 GMT. The metal used widely in the power and construction industries touched $10,072 last week for its highest since Oct. 21.
“Metals-intensive sectors of China’s economy continued to cool in December. Investments into the infrastructure and property sectors are still shrinking,” said Julius Baer analyst Carsten Menke.
“The longer-term outlook for the property market is characterised by structural challenges related to a shrinking working age population and slowing urbanisation.”
CHINA: Property investment in China dropped by 13.9% year on year in December, falling at the fastest pace since early 2020. Investment grew 4.4% in 2021, the slowest annual growth since
2016.
INVENTORIES: Stocks of copper in LME-registered warehouses rose by 6,550 tonnes to 92,850 tonnes, easing fears of tighter supplies on the LME market.
ALUMINIUM: China’s annual aluminium output hit a record high of 38.5 million tonnes in 2021, though December output fell from the same month last year.
“Chinese production shrank for a fourth consecutive month in December, reflecting regulatory as well as environmental constraints,” Menke said.
“Adding in supply curtailments in Europe because of record-high electricity prices, the aluminium market’s supply cushions seem to be shrinking.”
Benchmark aluminium climbed above $3,000 a tonne last week to its highest since Oct. 21. It gained 0.7% to $2,996 a tonne.
NICKEL: Dwindling stocks in LME-registered warehouses and in those monitored by the Shanghai Futures Exchange (ShFE) fuelled nickel’s rally last week to $22,935 a tonne, its highest since August 2011.
Worries about availability of nickel that can be delivered against LME and ShFE contracts have created significant premiums for near-term contracts.
Three-month nickel ceded 0.4% to $22,100 a tonne.
OTHER METALS: Zinc fell 0.2% to $3,514, lead gained 0.2% to $2,359 and tin was up 2.5% at $41,350.