A rout driven by lower energy costs
and on speculation demand will weaken in China, the world’s
largest metals user, sent copper down. The metal fell 7.4 percent this week after tumbling to the
lowest since 2009.
As Bloomber reports, copper is the worst performing metal so far this year, which plunged to the weakest in 12 years this week amid the World Bank cutting its forecast for global growth, citing economic slowdown in Europe and China.
Copper for delivery in three months gained 0.1 percent to $5,636 a metric ton ($2.56 a pound) on the London Metal Exchange at 2:16 p.m. in Hong Kong. Prices dropped 5.3 percent on Jan. 14 to $5,548, the lowest close since July 2009.
The metal rose on Jan 15 following a surge in China’s credit growth. Aggregate financing in December was 1.69 trillion yuan ($273 billion), the People’s Bank of China said in Beijing on Jan. 15, topping the 1.2 trillion yuan median estimate in a Bloomberg survey.
Industrial production in the second-biggest consumer, the U.S., fell 0.1 percent in December from the previous month.
“The market is too focused on the negative side of things,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “Not even the U.S. economy” is changing the negative sentiment.
The price move “is considered to be a mix of bargain-hunting, short covering and the surge in credit growth in China
easing some demand concerns,” analysts including Rajneet Kaur
at Australia & New Zealand Banking Group Ltd wrote in a note.
“The data suggests monetary policy easing in China is working, but further easing is required as the economy continues to slow.”
Demand growth for the metal in China will slow to 4 percent in 2015 from 5.5 percent last year, according to estimates by CRU Group, a research company. China accounts for 45 percent of global copper demand, compared with 8 percent for the U.S., Morgan Stanley estimates.
Copper futures for March delivery slid 0.1 percent to $2.555 a pound in New York, while the metal in Shanghai for the same month fell 0.1 percent to 40,880 yuan ($6,581) a ton.
On the LME, aluminum rose and zinc fell. Nickel and tin were little changed.
