Tuesday, 28 July 2015 23:14
LONDON: Copper prices rose on Tuesday, but the market remained nervous over the latest convulsions in Chinese equities and the possible ramifications for demand from the world’s top metals consumer.
Chinese shares fell as Beijing scrambled once again to prop up a market whose wild gyrations have heightened fears about the financial stability of the world’s second-biggest economy.
“There is tremendous downside pressure coming from the Chinese stock market. Fear is the ascendant emotion at the moment,” said Macquarie analyst Vivienne Lloyd. “The weak (manufacturing survey) last week reinforced the unease.” China’s factory sector contracted by the most in 15 months in July as shrinking orders depressed output to its lowest since March 2014, a private survey showed, reinforcing views that the Chinese economy needs more stimulus.
Benchmark copper on the London Metal Exchange rose 2.2 percent to close at $ 5,300 a tonne from $ 5,188 at the close on Monday, when the metal used in power and construction hit a six-year low at $ 5,164.
Traders said prices gained more than $ 10 in one minute late in the session after news that Chile’s state-run Codelco said it would halt operations at its Chuquicamata copper mine, the largest open-pit mine in the world, after a week-long strike by contract workers.
Three-month aluminum gained 1 percent to close at $ 1,655, nickel gained 3 percent to close at $ 11,325 , lead rose 1.6 percent to close at $ 1,722.50 and zinc rose 2.4 percent to close at $ 1,980. Many are reviewing previous expectations of higher zinc prices over coming months due to tighter supplies.
“Continued sluggish growth in galvanized steel sheet production in China and subdued Chinese H1 construction do not support the consensual bullish demand thesis,” Citi said in a note.
Tin rose 3.2 percent to close at $ 16,150, matching its May 7 high on expectations of falling shipments from top exporter Indonesia, which is tightening rules for tin exports.
