LONDON: Copper prices slumped to their lowest in nearly two months on Wednesday after recent weak economic data reinforced demand fears while a looming central bankers conference focuses attention on interest rates.
Three-month copper on the London Metal Exchange (LME) fell for a third day, sinking by 2.3% to $9,031 a tonne by 1625 GMT, the lowest price since June 21.
“We’re seeing a breakdown in the technicals, the growth outlook from China is not supportive and the dollar is challenging key resistance areas,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“It’s a wait-and-see kind of market. There could be potential for changing the stance on interest rates and tapering (of monetary stimulus) next week, so it’s keeping the market nervous,” he added, referring to the annual Jackson Hole conference of central bankers.
LME copper broke below the uptrend line stretching from the low of March 2020 at $9,230, which could send prices down to the 200-day moving average at $8,820, Hansen said.
Data on Wednesday showed US homebuilding fell more than expected in July while Chinese factory output and retail sales growth have slowed sharply.
Copper had rebounded during Asian trading, gaining support from news that residents near MMG’s Las Bambas copper mine in the Peruvian Andes have blocked a road used to transport the metal after a two-week truce.
China’s July aluminium imports were up 6.1% from the previous month, data showed on Wednesday, hitting their highest since September 2020.
LME aluminium fell 1.4% to $2,562 a tonne.
Yunnan Chihong Zinc & Germanium said late on Tuesday that one of its zinc subsidiaries had suspended production after three workers were killed in a gas leak.
LME nickel fell 1.7% to $18,875 a tonne, zinc shed 1% to $2,984, lead lost 1.5% to $2,289 and tin dropped 1.2% to $35,360.
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