Home / Commodities / Commodity News / Copper slides to 1-month low as Evergrande crisis spurs selling

Copper slides to 1-month low as Evergrande crisis spurs selling

Copper prices fell on Monday to one-month lows as the prospect of a debt default at China property developer Evergrande Group fuelled a sell-off across financial markets and investors headed for the safe haven dollar.

Benchmark copper CMCU3 on the London Metal Exchange was down 2.5% at $9,079 a tonne at 1115 GMT. Prices of the metal used widely in the power and construction industries earlier touched $9,052.50 a tonne, the lowest since Aug. 20.

“Copper prices are falling in sympathy with risk-off trading and weak sentiment because of Evergrande,” said Giles Coghlan, analyst at broker HYCM.

“It is a concern in the short term, but I don’t think it is going to be another crisis like Lehman’s because of the high level of down payments you need to make in China for property.”

RISK-OFF: Evergrande has been scrambling to raise funds to pay lenders, suppliers and investors, with regulators warning that its $305 billion of liabilities could spark broader risks to China’s financial system if not stabilised.

DOLLAR: A higher U.S. currency makes dollar-denominated commodities more expensive for holders of other currencies, which would subdue demand.

TECHNICALS: Strong support for copper around $9,060, where the 200-day moving average sits has been tested, but traders expect it to hold for now. The first upside barrier comes in at around $9,380, the 21-day moving average.

NICKEL: Prices of the stainless steel metal slipped as traders shrugged off the idea of Indonesia imposing export taxes on products with less than 70% nickel content to drive expansion of the country’s domestic processing industry.

Nickel CMNI3 was down 2.1% to $18,945 a tonne.

STOCKS: Nickel prices are expected to be supported by falling stocks of the metal in LME registered warehouses MNISTX-TOTAL, which at 169,992 tonnes have dropped 35% since the middle of April.

OTHER METALS: Aluminium CMAL3 was down 0.5% at $2,869.5 a tonne, zinc CMZN3 fell 1.6% to $3,038 a tonne, lead CMPB3 ceded 0.7% to $2,166 and tin CMSN3 lost 0.8% to $33,850.
Source: Reuters (Reporting by Pratima Desai; editing by Barbara Lewis)

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping