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Thursday, March 30, 2023

Copper extends losses on energy crunch, China coal intervention

LONDON: Copper prices extended their downward path on Friday, pressured by uncertainty over China’s moves to dampen down coal prices and as speculators squared positions ahead of the weekend. Prices had rebounded in the morning on renewed worries about scarce supplies but later went into the red.

Three-month copper on the London Metal Exchange (LME) had sunk 1.1% to $9,723 a tonne by 1625 GMT, adding to losses of 3.5% in the previous session. Metals prices slid on Thursday, partly because of intervention by China to cool surging coal prices.

“As long as energy prices, and particularly coal prices in China, continue to fall further, this should put pressure on metals prices,” said Daniel Briesemann, an analyst at Commerzbank in Frankfurt.

Prices are not expected to decline much more, however, because the energy crunch is expected to keep supply constrained, he added. “We expect to see higher metals prices going forward. We think the supply situation will deteriorate further before it gets better,” he said. On-warrant LME inventories, those not earmarked for delivery, have tumbled by more than 90% since mid-August.

“There remains enough uncertainty to keep both bulls and bears on their toes,” Al Munro at broker Marex said in a note. In China, prices for energy-intensive aluminium hit their lowest levels in more than a month on tumbling Chinese coal prices. In London, LME aluminium fell 1.2% to $2,876 a tonne after sliding 5.2% a day earlier.

Rising aluminium inventories in China also weighed on prices, with Shanghai stocks up for four straight weeks and social stocks in China at their highest level since May 27 at 957,000 tonnes.

MMG Ltd’s Las Bambas, one of Peru’s largest copper mines, said it does not have any pending commitments with Andean communities that have blocked the road used by the company to transport the mineral. LME zinc dropped 0.3% to $3,421 a tonne, nickel slipped 1.1% to $19,715, while lead added 0.6% to $2,413.50 and tin advanced 0.1% to $37,280.

Copper extends losses on energy crunch, China coal intervention

Source: Brecorder

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