Copper steadies after sharp losses; other metals fall on concerns about China

LONDON — Copper steadied on Wednesday after sharp falls in the previous session, while other metals fell on concerns that China could see a weaker first half of 2018 and as investors looked to reduce their long exposure before the end of this year.

Three- month copper on the London Metal Exchange (LME) ended up 0.10% at $6,550 a ton, having plummeted 4.20% on Tuesday, its steepest daily drop since July 2015.

“We’re just bouncing a tad (in copper)… from here, a winter slowdown in China, the government’s intention to rein back financial risk, that could have a ( negative) impact on copper demand,” said Ole Hansen, Saxo Bank head of commodity strategy. “Also the speculative position in metals has been to the long side (so) if we do run into some risk aversion, that (could) drive prices lower because of the need to lower exposure… this time of year.”

Zinc, used to galvanize steel, hit its lowest since mid- October at $3,068 a ton; nickel, used mainly in stainless steelmaking, hit its weakest since early October at $ 10,755, while aluminum hit its weakest since early August at $2,015.50.

UNDER PRESSURE

A raft of Chinese data in coming weeks is expected to show that the world’s second-largest economy came under growing pressure in November as the government intensified crackdowns on polluting industries and financial risks.

Chinese steel futures dropped more than three percent on Wednesday after recent sharp gains that lifted prices to their strongest level in three months, although firm demand and tight supply kept investor sentiment upbeat.

Zinc fell below its 100- day moving average, a technical indicator, sending a bearish signal to markets, while nickel remained below the 100-day moving average after cracking the level on Tuesday, when it fell 4.60%.

Traders pointed to a large 3,500 strike at $6,500 in December copper put options, which could drag on prices.

The Tanzania-Zambia Railway Authority has suspended all train services, including the transportation of copper, following a strike by workers in Africa’s no. 2 producer of the metal.

Indicating a potential squeeze in nearby zinc availability, LME data showed one entity holds between 80- 90% of physical zinc warrants as well as cash and “tomorrow” contracts.

Among other industrial metals, zinc ended down 0.90% at $3,085, lead closed up 0.30% at $ 2,507, tin ended down 0.20% at $ 19,480, nickel closed down 0.60% at $ 10,805, while aluminum ended down 1.70% at $2,018. —