Copper Prices Plunge Sharply Amid Concerns Over Chinese Demand. Due to worries about decreasing Chinese demand, copper prices fell on Thursday for the eighth straight session, reaching their lowest point in two months.
Copper Prices Plunge Sharply
The industrial metals bellwether copper, which is used in everything from wire to power grids, dropped 1.3% to $9,050 per tonne in morning trading in New York. This is the lowest level of the metal since early April and over 5% below a peak reached in late May.
Gold, zinc, aluminum, and tin all saw declines, and silver dropped 4.4% to $27.71 per troy ounce.
Copper prices fall again on concerns about Chinese demand
Copper fell below $9,000 per tonne on Thursday, the first time since April. Colin Hamilton, managing director of commodities research at BMO, described it as "a symptom of investor unwinding in the data center trade, as well as a continued buyer's strike in China."
 |
| Copper Prices Pointer Source: Bloomberg |
Copper prices fell in trading today, following the release of weak manufacturing data in China, the largest consumer of the metal in the world. However, losses have been limited thanks to the prospect of additional economic stimulus from Beijing.
Copper contracts for three-month delivery on the London Metal Exchange fell by 0.3% to reach $10,109 per metric ton in official open trading, after falling by 9% since reaching a record level of $11,104.50 on May 20.
Economic data showed an unexpected decline in China's manufacturing activity index for May, as the real estate crisis in the world's second-largest economy continues to impact business, consumer and investor confidence.
“Weak Chinese numbers, below 50, may prompt people to reassess their expectations for demand from China,” said Nitish Shah, commodities strategist at Wisdom Tree.
The official manufacturing PMI fell to 49.5 in May from 50.4 in April, below the 50 mark that separates growth from contraction.
“These weak numbers may also be a catalyst for more urgent action by China’s policymakers,” Shah added.
The most actively traded July copper contract on the Shanghai Futures Exchange fell 1.6% to 82,500 yuan ($11,388.89) per ton.
Despite the recent losses, copper on the London Metal Exchange rose by about 2% this month and 19% this year. Copper's rally was fueled by speculators and a short squeeze on the US COMEX exchange, sending prices about $1,000 below London Metal Exchange levels.
COMEX copper prices fell more than the London Metal Exchange in recent days, narrowing the gap to about $180 per ton. June copper futures fell 0.9% to $4.63 a pound.