Base Metal Prices Decline on Weakened Chinese Demand Outlook

Base Metal Prices Decline on Weakened Chinese Demand Outlook

In London, base metal prices, including copper, experienced a downturn on Tuesday due to a deteriorating demand outlook in China, a major consumer of these commodities. This shift was triggered by China’s release of data indicating slower growth in industrial output and decreased investment in its property sector.

On the London Metal Exchange (LME), benchmark copper (CMCU3) registered a 1.2% drop, reaching $8,189.5 per metric ton as of 11:31 GMT. This marked its lowest point since June 29. Copper, commonly utilized in construction and power sectors, is currently on a downward trajectory for the fourth consecutive session.

Amelia Xiao Fu, the head of commodity market strategy at Bank of China International, noted that base metals might encounter sustained pressures due to China’s declining industrial production and property investment. She added that the implementation of more supportive policies could potentially establish a price floor to prevent excessive declines.

Beijing took measures to bolster activity by lowering key policy rates on Tuesday. However, analysts highlighted that more substantial support would be necessary to rejuvenate growth.

LME aluminum witnessed a 0.1% decrease, reaching $2,144.5 per metric ton. This followed a drop to its lowest point since July 7, recorded at $2,136.5. The discount for near-term delivery compared to the three-month LME aluminum contract reached levels not seen since the global financial crisis in 2008, indicating weakened demand.
Other metals reliant on growth exhibited significant declines as well. LME nickel reached its lowest point since July 2022, trading at $19,795 per metric ton, while zinc touched its weakest level since June 6, standing at $2,305.

LME’s daily data highlighted substantial zinc arrivals at LME-registered warehouses in Singapore.

Nickel saw a 0.8% fall to $19,935, zinc dropped by 1.4% to $2,316, lead experienced a 0.3% rise to $2,102.5, and tin suffered a 2.1% loss, reaching $24,790.
Despite a mining ban in Myanmar, the world’s third-largest mining nation, tin faced pressure from considerable inventories and weak demand.

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