Monday, October 25

Copper falls as energy crisis points to lower demand


Article content

Copper prices fell on Tuesday as rising electricity prices raised concerns that downstream consumers would reduce production, resulting in lower demand for the metal.

Three-month copper on the London Metal Exchange fell 1.5% to $9,404 a tonne by 0309 GMT, while the most-traded November copper contract on the Shanghai Futures Exchange rose 0.5% to 69,870 yuan ($10,829.37) a tonne, tracking overnight gains in London .

LME aluminum declined 1.1% to $3,029 a tonne, zinc was down 0.6% at $3,210 a tonne and tin decreased 1.6% to $35,800 a tonne.

Advertisement

Article content

ShFE aluminum rose 1.4% to 23,345 yuan a tonne, zinc advanced 1.9% to 23,640 yuan a tonne, while tin dropped 2.2% to 276,970 yuan a tonne.

Power prices have risen to records in recent weeks, driven by energy shortages in Asia, Europe and the United States, as the pace of economic recovery from the pandemic has supercharged energy demand.

China’s central bank withdrawing liquidity from the market also curbed risk sentiment, and property giant China Evergrande potentially missing another debt payment also hindered market confidence in the Chinese real estate sector, which consumes a large amount of metals.

However, cushioning further falls in metals prices are worries of a disruption in metals production due to the same energy crisis as well as rising interest in owning metals as a hedge against inflation.

Advertisement

Article content

FUNDAMENTALS

* Chile’s state miner Codelco will produce 2% to 3% more copper this year than it had previously expected, its chairman said.

* China’s major copper smelters in September kept output flat month-on-month due to maintenance and power curbs, Antaike said on Monday.

* For the top stories in metals and other news, click or

MARKETS NEWS

* Asian shares dropped and the safe-haven dollar held firm, as a global energy crunch fueled inflation fears, clouding investor sentiment before the US corporate earnings season.

DATA/EVENTS (GMT)

0600 UK Claimant Count Unem Chng Sept

0600 UK ILO Unemployment Rate Aug

0900 Germany Zew Economic Sentiment Oct

0900 Germany Zew Current Conditions Oct ($1 = 6.4519 yuan) (Reporting by Mai Nguyen in Hanoi; Editing by Amy Caren Daniel)

Advertisement

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.



financialpost.com

Leave a Reply

Your email address will not be published. Required fields are marked *