Copper fell to its lowest price in 1-1/2 years on Monday, joining a wide retreat in commodities as disappointing economic data from top metals consumer China reinforced concerns over prospects for demand. China's economic recovery unexpectedly stumbled in the first three months of 2013 as the annual rate of growth eased back to 7.7 percent from the 7.9 percent pace set in the final quarter of last year, official data showed.
Industrial output in March also undershot expectations and added to anxiety among investors after a negative reading of US consumer sentiment, soft retail sales and rekindled worries about sovereign debt in the euro zone late last week. Three-month copper on the London Metal Exchange fell to $7,085 a tonne in intraday trade, its lowest since October 2011. It ended at $7,202, down from a close of $7,406.50 on Friday, bringing year-to-date losses to more than 9 percent.
Aluminium at one point slid to its lowest in three and a half years at $1,818 a tonne, while tin fell nearly 7 percent to a low of $20,500, its lowest since late November 2012. LME nickel sank to its lowest level in more than seven months, while lead and zinc reached their lowest in more than five months. Metal purchases by Chinese consumers have been subdued so far this year as rising stockpiles and doubts about the pace of growth have hit demand in the country, which consumes about 40 percent of global refined copper.
"The Chinese market is being kept up by credit invested in state-owned enterprises, though even that wasn't enough to keep GDP on track to where the market expected it to be in Q1," said Tom Kendall, an analyst at Credit Suisse. In other commodity markets, gold slumped 6 percent to a two-year low, silver fell to its lowest since October 2010 and Brent crude sank to below $101 a barrel, a nine-month low.
"We are clearly in the throes of a massive sell-off ... as investors are rightly concluding that global growth prospects remain too tepid to sop up the growing surpluses evident in a number of sectors, including, steel, aluminium and copper," said Ed Meir, an analyst at INTL FCStone. Slowing factory output and investment spending in China has led analysts to start slashing full-year growth forecasts for the world's second-largest economy, despite official insistence that the outlook is favourable. "Citi expects 2013 to be the year in which the death bells ring for the commodity supercycle after its duly noted sunset, ushering in a new decade of opportunities based on how individual commodities will perform against one another and against broader market indicators," the bank said in a note.
A spate of supply-side problems offered little support for copper, unlike in previous years, as the market heads for its first year of surplus in several years, and inventories of refined metal are near decade-highs both in London and Shanghai. In other metals, soldering metal tin ended at $21,050 from Friday's close of $22,005, while zinc, used in galvanising, closed at $1,869 from $1,874. Battery material lead ended at $2,033 from $2,049, aluminium closed at $1,866 from $1,852, and stainless steel ingredient nickel ended at $15,695 from $15,850.
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