Shanghai copper futures headed lower on Thursday and London prices butted against support as concerns about demand from China shook investors' faith in commodity markets. Growing signs that China's economy is slowing weighed on copper, and the zinc market was also in for a rocky road, analysts said, facing slack demand and supply overhangs.
The October copper contract, the most active on the Shanghai Futures Exchange, fell by 560 yuan, or 1 percent, at 59,140 yuan ($8,636) a tonne at 0222 GMT, while London Metal Exchange three-month copper dropped $15 to $7,600. Copper's fundamentals have turned more bearish in the past few weeks, with inventories up by almost a quarter in the last month to 150,325 tonnes, enough for three days of world consumption and their highest since February.
LME copper continued to bump against technical support at $7,600, and traders worried that the combined weight of stocks, soggy Chinese demand and weakness in other commodities could force prices down to $7,400. The discount for Shanghai copper versus London prices, including China's 17 percent VAT, widened to 1,974 yuan a tonne, down from 1,554 yuan on Wednesday.
Shanghai October zinc futures fell 0.7 percent or 100 yuan to 14,340 yuan, extending recent losses to touch a lifetime low for the third month contract of 14,255 yuan. LME zinc fell $15 to $1,750. LME nickel fell 1 percent to $17,625, its lowest since June 2006. Jinchuan Group Ltd, China's largest nickel produce, cut spot nickel prices by 6,000 yuan to 149,000 yuan ($21,760).
Comments
Comments are closed.