LONDON: Copper slumped to its lowest level in more than three months on Tuesday as rising inventories highlighted healthy supplies.
Concern about trade wars, higher U.S. interest rates and a stronger dollar also weighed on industrial metals markets.
London Metal Exchange prices extended losses in the European afternoon as U.S. computer-driven funds stepped up selling.
“The U.S. has opened up and they’re carrying on the negative sentiment,” said Geordie Wilkes, head of research at Sucden Financial.
In the morning, copper was hit by data showing LME copper stocks grew by a further 3,200 tonnes on Tuesday to 322,475 tonnes, bringing this month’s rise to 61 percent.
While some investors have been worried that potential strikes at copper mines could create shortages, this was not a major threat given robust supplies, said Caroline Bain, chief commodities economist at Capital Economics.
Some labour deals have already been sealed while progress was announced on Tuesday in wage talks at Antofagasta’s Los Pelambres copper mine in Chile.
“We’ve been forecasting from the beginning that copper prices would fall this year because we just didn’t think the market was that tight,” Bain said, adding that her year-end target was $6,500.
Three-month LME copper closed 1.4 percent down at $6,755 a tonne, marking a fourth session of losses. It had dipped as low as $6,730, its weakest level since Dec. 14.
Source: Brecorder.com
