Prices for copper have dropped to their lowest since June after concerns over Chinese demand arose from disappointing economic data from the country.
Futures for copper with a delivery date in three months on the London Metal Exchange (LME) reached a price per ton as low as $6,873 on Wednesday right after the release of data that showed a decline in July in investments going towards China’s economy. According to estimates from Macquarie, the east Asian country is currently the largest user of the refined metal accounting for 45% of global consumption.
Copper previously reached its highest value in five months of $7,172 per ton last month with help from short covering investors on the heels of fraud allegations against a Qingdao-based metals company and renewed demand for base metals. The trend reversed with China’s cathode imports dropping 8% in July and local production ramping up after smelters were forced to shut down during the first six months of the year due to maintenance problems.
Data shows that money managers on the LME have reduced their net long positions on copper last week by 11,355 lots, or 283,375 tons, to make room for shorts. The metal is commonly used in construction, housing, and electronics.
Macquarie analyst Vivienne Lloyd says that, “… a situation of weaker construction in China, some softening in the European market and increased mine production” is likely enough to make the commodity metal weaken further during the last half of the year. The investment bank estimates that a surplus of 229,000 tons will be present before the end of year to turn around the deficit of 160,000 tons during the beginning of 2014.
Zinc also declined, losing 1.9% for a price per ton of $2,283. Aluminum and nickel dropped 1% to $2,029 and by 1.4% to $18,550 respectively.
The material has been provided by InstaForex Company – www.instaforex.com
Prices for copper have dropped to their lowest since June after concerns over Chinese demand arose from disappointing economic data from the country.
Futures for copper with a delivery date in three months on the London Metal Exchange (LME) reached a price per ton as low as $6,873 on Wednesday right after the release of data that showed a decline in July in investments going towards China’s economy. According to estimates from Macquarie, the east Asian country is currently the largest user of the refined metal accounting for 45% of global consumption.
Copper previously reached its highest value in five months of $7,172 per ton last month with help from short covering investors on the heels of fraud allegations against a Qingdao-based metals company and renewed demand for base metals. The trend reversed with China’s cathode imports dropping 8% in July and local production ramping up after smelters were forced to shut down during the first six months of the year due to maintenance problems.
Data shows that money managers on the LME have reduced their net long positions on copper last week by 11,355 lots, or 283,375 tons, to make room for shorts. The metal is commonly used in construction, housing, and electronics.
Macquarie analyst Vivienne Lloyd says that, “… a situation of weaker construction in China, some softening in the European market and increased mine production” is likely enough to make the commodity metal weaken further during the last half of the year. The investment bank estimates that a surplus of 229,000 tons will be present before the end of year to turn around the deficit of 160,000 tons during the beginning of 2014.
Zinc also declined, losing 1.9% for a price per ton of $2,283. Aluminum and nickel dropped 1% to $2,029 and by 1.4% to $18,550 respectively.
The material has been provided by InstaForex Company – www.instaforex.com
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