Base metals fall on risk-off sentiment

Base metals prices largely fell on Tuesday, weighed down by slowing global growth momentum and risk-off sentiment, with aluminium and zinc hitting three-month lows.
Three-month copper on the London Metal Exchange (LME) CMCU3 fell 0.5% to $8,980per metric ton by 0416 GMT, while the most-traded September copper contract on the Shanghai Futures Exchange (SHFE) SCFcv1 declined 1.5% to 73,220 yuan ($10,085.12) a ton.
“Investors are looking at the big picture of slowing global growth momentum and are preparing by staying away from risky assets and getting into bonds,” said Sandeep Daga, a director at Metal Intelligence Centre.
Money managers’ net long positions on COMEX copper fell to 19,515 contracts on July 23 from 75,342 contracts on May 21, exchange data showed.
“If history repeats, metals need to dive to a new 2024 low before meaningful support comes in. Also, we should keep an eye on U.S. equities to know if the selling is becoming synchronised,” he added.
LME copper 2024 low is at $8,127 a ton hit in February, 9.5% below the current price level.
The sell-off could accelerate if China’s factory data due on Wednesday shows a decline from the previous month, Daga added.
The fall in copper prices, however, has helped with physical demand in China. The import premium climbed to $25 a ton since last week, compared to a $20 discount in May when copper prices hit a record high.
LME aluminium CMAL3 eased 0.6% to $2,238 a ton, zinc CMZN3 edged down 0.4% at $2,626.50, lead CMPB3 declined 1% to $2,046, tin CMSN3 dipped 0.3% to $29,200 while nickel CMNI3 rose 0.6% to $15,935.
LME aluminium fell as much as 0.8% to $2,232, the lowest since March 11, while zinc hit the weakest since April 8 earlier in the session at $2,617.
SHFE aluminium SAFcv1 declined 1.6% to 18,980 yuan a ton, zinc SZNcv1 decreased 1.1% to 22,450 yuan, tin SSNcv1 dropped 2.1% to 242,550 yuan, while nickel SNIcv1 rose 0.4% to 127,350 yuan and lead SPBcv1 was nearly flat at 18,670 yuan.
Source: Reuters (Reporting by Mai Nguyen in Hanoi; Editing by Eileen Soreng)