Copper fell on Tuesday as investors retreated on mounting worries recent price gains may have been overdone and on concern about slowing Chinese demand. Three-month copper on the London Metal Exchange closed at $6,311 a tonne, from $6,418 at the close on Monday. Earlier the metal used in power and construction touched a session low of $6,270 a tonne.
"Copper is just wobbling a bit," said Nick Moore, global head of commodity strategy at RBS Global Banking and Markets. "It is a bit of a pause for thought and reflection." Prices of the red metal have more than doubled this year, as a combination of Chinese stockpiling, fund buying and improving economic sentiment galvanised buyers.
China, worried about its $2 trillion pile of foreign currency, has been looking at ways to hedge its exposure to the dollar, including using the money to buy inflation-resistant physical assets. But data on Monday showing China's refined copper imports fell by 23 percent in July indicated demand from the world's top copper consumer was slowing. Also highlighting weak demand, copper stocks rose 3,875 tonnes to 296,600 tonnes - the highest since early June.
Aluminium closed at $1,900 a tonne from $1,927. LME stocks for the metal, used in transport and packaging, slipped 3,575 tonnes, but held near record levels above 4.6 million tonnes. Steel-making ingredient nickel closed at $19,355 from $19,600 on Monday and battery material lead closed at $2,061 from $2,025 a tonne.
Investors were keeping a close eye on developments in Asia, where Hunan, the second-biggest producer of refined lead among China's provinces, is checking lead smelters in the wake of lead poisoning in Shaanxi province. Earlier lead rose to $2,068, the highest since late September last year. Analysts warned there could be more lead closures in China, as officials clamp down on polluting smelters in the region. Zinc edged lower to close at $1,852 a tonne from $1,856 and tin was untraded at the close but was last bid at $13,990 from $14,375.
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