- Write by:
-
Wednesday, September 4, 2019 - 10:49:04 AM
-
370 Visit
-
Print
Mining News Pro - Copper fell to the lowest since 2017 as investors faced fresh evidence of a global slowdown and fading prospects for a deescalation in the US-China trade war.
Long known as a canary in a coal mine for the economy, copper has slid 14% from this year’s high in mid-April on the back of a manufacturing slump and warnings that major economies are heading into recession. Prices fell 0.2% to settle at $5,610 a metric ton on the London Metal Exchange. A gauge of copper-producer shares headed for the biggest loss in more than two weeks.
U.S. factory activity unexpectedly contracted in August for the first time in three years, further eroding the outlook for demand. A rallying dollar has added selling pressure on industrial metals this quarter amid a steady erosion in the purchasing power of buyers holding other currencies. China’s onshore yuan fell to the lowest since 2008 on Tuesday.
“The selling has already gone a long way, but we can’t rule out the possibility copper will go lower,” Xiao Fu, head of global commodities strategy at BOCI Global Commodities U.K., said by phone from London. “If the macro picture remains weak or we see other negative shocks coming into the picture, we could see further sell-offs.”
While delegates from Washington and Beijing struggled to agree on terms to restart trade negotiations, research houses from Oxford Economics to Nomura warned that China’s economic activity will soften further. China’s growth reached 6.2% in the second quarter, the slowest pace in almost three decades.
Lead, nickel, tin and zinc also declined in London, while aluminum advanced.
Sentiment in metals markets took a further hit as global electric vehicle sales fell for the first time in modern history, fueling doubts about one of the few bright spots for demand.
The poor macroeconomic conditions have also negated signs of rising spot demand for metal on the LME. Orders to withdraw copper in warehouses tracked by the bourse rose to the highest in a year on Tuesday, continuing a sharp rebound seen since late August.
Shanghai Metals Market data shows the premium for physical copper in China increased to a fresh year-to-date high of $77 a ton, reflecting a marginal improvement of demand in August combined with a reduced level of scrap substitution to the cathode, ING senior commodities strategist Wenyu Yao said in an emailed note. In the meantime, the average operating rate from copper wire and cable manufactures in August has risen from July, Yao said.
The muted price reaction is understandable, with broader markets bracing for a further possible deterioration in economic data, particularly in the U.S. and China, Fu said.
“There are further risks coming up, given the lackluster backdrop for global demand growth,” according to Fu.
Short Link:
https://www.miningnews.ir/En/News/419662
Iron ore futures prices ticked lower on Monday, weighed down by diminishing hopes of more stimulus in top consumer ...
Copper traded near $10,000 a ton, hitting a new two-year high on its way, as investors continue to pile in on a bet that ...
A Russian arbitration court ruled on Monday that four units of Swiss commodities trader Glencore will pay more than 11.4 ...
A Native American group has asked all members of a US appeals court on Monday to overturn an earlier ruling that granted ...
Codelco is exploring more partnerships with the private sector as Chile’s state copper behemoth looks to recover from a ...
The London Metal Exchange (LME) on Saturday banned from its system Russian metal produced on or after April 13 to comply ...
China’s state planner on Friday finalized a rule to set up a domestic coal production reserve system by 2027, aimed at ...
Chile’s SQM called another investors meeting at the request of its second-largest shareholder, Tianqi Lithium Corp., ...
The world’s coal-fired power capacity grew 2% last year, its highest annual increase since 2016, driven by new builds in ...
No comments have been posted yet ...