Copper steadies, but still near 6yr low

  1. 2.5k
    Posts

    Copper has steadied after hitting a one-month low, but fears that a sharp slowdown in China will dent demand for commodities persist, sending shares of commodity firms lower.

    Mining and trading giant Glencore, whose shares fell by almost a third on Monday, gained in London trade but only after its Hong Kong-listed shares fell more than 30 per cent.

    Asian commodity merchant Noble fell as much as 15 per cent overnight.

    "The (price) move seems to be based on fear rather than reality, it's overdone. People are writing about this glut of copper, where is it? Shanghai bonded stocks have drawn 150,000 tonnes since August and China's refined copper imports in August were up 12 per cent," said Citi analyst David Wilson.

    China consumes nearly half the world's copper.

    Benchmark three-month copper on the London Metal Exchange ended up 0.1 per cent at $US4,970 a tonne, having struck its weakest since late August at $US4,915.50. The metal is not far off a six-year low of $US4,855 hit in August.

    Shanghai Futures Exchange copper fell 2.5 per cent to 37,760 yuan ($A9,488). Shanghai markets will close from Thursday for a week for the mid-autumn festival.

    Indicating worsening sentiment, funds trading LME copper reduced their net "long" or buy position to 12,506 lots last Friday from 16,513 lots on September 18, data showed.

    "As long as the August lows hold, (copper) remains vulnerable to a year-end rebound toward $US5,700-5,800," said T-Commodity partner Gianclaudio Torlizzi, referring to the metal's technical momentum signals.

    China announced more infrastructure spending as it looks to shore up growth, approving subway projects in three cities including Beijing, Tianjian and Shenzhen worth a total 464.77 billion yuan.

    Data on Thursday is likely to show China's factory sector shrank for the second month in a row in September.

    Aluminium ended up 0.8 per cent at $US1,564, having hit a month low earlier of $US1,542.

    Alcoa Inc's decision to split in two will heighten pressure on one of the world's top aluminium producers to cut costs or close unprofitable smelting capacity.

    Zinc closed up 1.6 per cent at $US1,656, recovering from a recent rout.

    "You will have upside corrections but path of least resistance is to downside until you've got more cutbacks in metals with lots of stock like aluminium and zinc," said William Adams, head of research at FastMarkets.

    Lead ended flat at $US1,657, tin fell 0.3 per cent to $US15,600 while nickel rose 0.1 per cent to $US9,875.

Your browser is too old for TopStocks and not secure. Please update your browser