Copper firms, other metals under pressure

Reuters | Updated on November 13, 2018 Published on November 13, 2018

Three-month copper on the London Metal Exchange was up 0.4 per cent at $6,072 a tonne by 0402 GMT, after initially hitting a session low of $6,016.

Investors worried over slower growth demand

London copper edged higher on Tuesday after slipping to a 1-1/2-week low earlier in the session, but aluminium and nickel stayed close to multi-month lows as investors were worried over slower global demand.

The dollar traded just below a 16-month high versus a basket of peers, benefiting from safe-haven flows as investors shunned riskier assets because of political uncertainties in Europe and fears of a global economic slowdown.

A stronger US dollar - which makes dollar-denominated assets such as commodities costlier for holders of other currencies - and worries over cooling growth in China had been weighing on industrial metals.

“Base metals suffered amid depressed demand from investors. While a strong (dollar) didn't help, rising stockpiles in various metals were the main instigator,” ANZ analysts said in a note.

Three-month copper on the London Metal Exchange was up 0.4 per cent at $6,072 a tonne by 0402 GMT, after initially hitting a session low of $6,016. The most-traded January copper contract on the Shanghai Futures Exchange fell 0.2 percent to 48,910 yuan ($7,032.45) a tonne.

LME aluminium gained 0.1 per cent to $1,944.50 a tonne, not far above a session low of $1,937 which matched Monday's 15-month trough. Nickel touched an 11-month low of $11,300 a tonne, and was last trading at $11,390, nearly flat from Monday.

“Without the support from downstream demand and weakening stainless steel prices, nickel prices may need to decrease more before stabilizing around the cost of production level,” Argonaut Securities said in a note.

In Shanghai, nickel was off 0.2 per cent at 94,770 yuan a tonne, near a 10-1/2-month low reached in the previous session. Aluminium fell as far as 13,690 yuan, its weakest since October 2016.

Most base metals were trading in tight ranges as investors await Wednesday's series of data from China,including industrial output and retail sales, for further clues on the economic health of the world's top metals consumer.

With the US economy at or beyond full employment and inflation likely to rise slightly above a 2 per cent goal over the next year, the Federal Reserve should continue to raise rates gradually, its newest policymaker said, but not necessarily next month.

Asian shares stumbled after a rout in tech stocks inflicted a hefty sell-off on Wall Street and a slump in oil prices.

Published on November 13, 2018
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