Base metals slide as China data hint at slowdown

LONDON — Base metals slid on Wednesday as data from China stoked fears of a slowdown in the world’s top commodities consumer, with falls in oil and global stocks indicating broad-based caution among investors.

World stocks were set for their longest losing streak in eight months while oil prices slipped for a fourth day, though there was some reprieve for the dollar after US data surprised on the upside.

“There’s definitely a move out of riskier assets which typically has a negative impact on commodities but there are fundamental reasons why commodities are selling off. China is slowing and yesterday’s data exemplified it,” said Caroline Bain, senior commodities economist at Capital Economics.

Data on Tuesday showed China’s economy cooled further last month, with industrial output, fixed asset investment and retail sales missing expectations as the government extended a crackdown on debt risks and factory pollution.

London Metal Exchange copper ended up 0.20% at $6,773 a ton, having earlier hit a more than one-month low at $6,713.

Aluminum ended up 1.20% at $2,106, having earlier hit its lowest since late August at $2,068.50.

“The timing and power in yesterday’s move lower (is) suggestive of it being macro driven. There is more downside to come over the next session or so. CTA sell programs are already apparent today across some of the metals,” said broker Marex Spectron in a note.

Nickel closed down 0.80% to $11,690 after sliding 5% on Tuesday, correcting from a surge to two-year highs earlier this month on hopes for a bounce in demand from the emerging electric vehicle market.

China’s top copper smelters held an unscheduled meeting in Shanghai on Tuesday to reaffirm their position that there will be no shortage of copper concentrate supply in 2018 as the key contract renegotiation season heats up.

Polish copper producer KGHM said this year’s output of electrolytic copper from its concentrates would be 35,000 tons rather than the planned 401,000 tons due to an accident at its smelter.

Unidentified traders on the Shanghai Futures Exchange added $1 billion to positions in copper contracts tied to the second half of 2018 this week, as investors continue to place big bets on the metal.

Chinalco, China’s biggest state-run aluminum producer, is cutting its alumina capacity by two million tons this winter to comply with pollution- related restrictions on heavy industry.

Zinc closed flat at $ 3,151.50, lead ended down 1.40% at $2,436, while tin closed down 0.70% at $19,340. —