LONDON: Copper prices in London extended their fall to the third consecutive session on Tuesday as concerns about demand in top consumer China and uncertainty about timing of interest-rate cuts worsened speculative sentiment towards growth-depended metals.
Three-month copper on the London Metal Exchange (LME) fell 0.7% to $8,961.50 per metric ton by 0959 GMT, after breaking below its 200-day moving average at $8,998.
Chinese leaders signalled on Tuesday the stimulus measures needed to reach this year’s economic growth target will be directed at consumers, deviating from their usual playbook of pouring funds into infrastructure projects.
“So far, Beijing’s measures to support growth have disappointed markets and the prolonged crisis in the property sector doesn’t show signs of bottoming out. Global copper inventories have ballooned and it will take time for demand to absorb these high inventories,” said Ewa Manthey, a commodities analyst at ING.
China’s factory activity data due on Wednesday likely shrank for a third month in July, a Reuters poll showed on Monday.
Copper loses ground on weak Chinese demand
The U.S. Federal Reserve is expected to maintain current interest rates at the conclusion of its two-day meeting on Wednesday, but may signal potential policy easing as soon as September.
The fall in copper prices, however, has helped with physical demand in China. The import premium climbed to $25 a ton since last week, compared with a $20 discount in May when copper prices hit a record high.
LME aluminium fell 0.9% to $2,230.50 a ton, after hitting $2,229 for its lowest since March 7.
Lead declined 1.2% to $2,042.50, tin dropped 1.7% to $28,805 and nickel was steady at $15,825. Zinc rose 0.1% to $2,638.
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