Copper tumbles below $US5000 mark
Base metals have closed lower in London as risk-averse market participants sold down their positions, worried about the prospects for China despite Tuesday's attempt by the country's central bank to stimulate the economy of the world's biggest buyer of metals.
The London Metal Exchange's three-month copper contract was down 2.7 per cent at $US4,929.50 a metric tonne in afternoon European trading, heading back below the psychologically important $US5,000 mark during the session.
All the other base metals closed lower. Aluminium was down 1.7 per cent at $1,531 a tonne, zinc lost 2.2 per cent to $US1,700.50 a ton, nickel gave back 1.4 per cent to $US9,570 a tonne, lead was down 1.9 per cent at $US1,648 a ton and tin was down 2.1 per cent at $US13,945 a tonne.
Industrial metals started the day lower after the Shanghai Composite Index closed down for the third day this week, falling 1.3 per cent.
"The metals markets have switched back to risk-off mode again today and find themselves under corresponding selling pressure," Commerzbank said in a note.
A cut in interest rates by the People's Bank of China on Tuesday provided only brief respite to prices, doing little to alleviate the market's concerns about the slowing of China's economy. The central bank's moves followed a series of economic interventions by the government in recent weeks.
Going forward, some analysts are focused on concerns over whether supply will outpace demand next year and cap price gains. Aluminium and copper are causing particular concern, not least given the sheer size of these two markets.
"With global demand growth having slowed sharply and the mining miniboom not over yet, we think copper will stay in supply surplus in 2016," BNP Paribas said in a note.