Thursday, 30 July 2015 12:35
MELBOURNE: London copper soured on Thursday, as jitters resurfac
ed in China’s sharemarkets and as a dollar revival picked up pace on bets of a looming rate rise in the United States.
Metals markets turned lower late in the Asian day, following slippage in China’s stocks on worries that banks were revisiting their share exposure. Concerns over flickering growth in top metals user China have overshadowed demand expectations, leading analysts such as Goldman Sachs to call for lower prices.
Growth in China’s manufacturing sector likely steadied in July but remained at a subdued pace, a Reuters poll showed, fuelling hopes that a slowdown in the world’s second-largest economy may be gradually bottoming out.
“We’ll need to see how much more stimulus is thrown at it – if China throws a lot, at the end of the day, prices have to hold – China really needs growth,” said Jonathan Barratt, chief investment officer at Sydney’s Ayers Alliance.
“I really want to see a bottom in copper, but I don’t have a high conviction we’re there yet.”
Three-month copper on the London Metal Exchange slipped by 0.6 percent to 0703 GMT, after closing a tad firmer in the previous session when prices hit the highest in six days at $ 5,398 a tonne.
Shanghai Futures Exchange copper fell half a percent to 38,560 yuan ($ 6,211) a tonne.
In a sign consumer demand in China was brightening, bonded copper premiums jumped by $ 10 to $ 85, before steadying on Thursday, taking premiums up to the highest since mid March.
Chinese state media reported that Chinese banks were investigating their exposure to the stock market via wealth management products and loans backed by stock as collateral.
A stronger dollar is seen capping any price advance for metals. The US economy and job market continue to strengthen, the Federal Reserve said on Wednesday, leaving the door open for a possible interest rate hike when central bank policymakers next meet in September.
Across other metals, Shanghai nickel and zinc , fell around 1.5 percent each, while tin eased 1.2 percent, shrugging off a disruption to Indonesian exports.
Indonesia’s PT Timah will be unable to export tin for much of August due to bureaucratic delays in the implementation of new rules for shipments, a senior official at the country’s top tin miner said on Thursday.
In news, Kazakh copper producer Kaz Minerals said on Thursday it was on track to hit its annual copper production target despite a build-up of copper concentrate due to scheduled maintenance at a smelter.
