Copper prices tripped up by political tensions

LONDON — Copper tracked equity markets lower on Tuesday on concerns of slowing demand in China and as geopolitical tensions escalated over the killing of a prominent Saudi journalist.

Benchmark copper ended the session 0.7% lower at $6,196 a ton. It touched a one-week high in the previous session after China, the world’s top metals consumer said it would provide stimulus to illiquid firms.

In the latest development since the killing of Saudi journalist Jamal Khashoggi, Turkish President Tayyip Erdogan said there were strong signs that the killing was planned and that he was killed in a “savage way.”

“Metals are reacting to what is happening in equity markets right now,” said Capital Economics senior commodities economist Caroline Bain, adding that concerns relate to slow global growth and potential escalation of tensions over the Khashoggi murder.

Investors were unconvinced by pledges from Chinese officials of an expansion of targeted measures to ease company financing problems after China’s thirdquarter growth slowed to its weakest since the global financial crisis.

“Most stimulus takes time to work through and turn into an upturn in commodities demand,” said Capital Economics’s Bain.

China’s tax cuts next year could exceed the equivalent of 1% of gross domestic product, a central bank adviser said, in a sign that policy makers might consider another round of tax reductions.

Marex Spectron said support for benchmark London Metal Exchange (LME) copper is at last week’s low in the $6,120-25 area.

The dollar index, a gauge of its value against six other major currencies, edged lower but was still near a two-month high.

World stocks fell to their lowest in a year, pushed down by a range of political and economic concerns including the US-China trade war and the Saudi Arabia situation.

Total copper inventories in LME-approved warehouses fell to 151,100 tons, the lowest level since April 2016.

China’s alumina exports in September registered a more than fivefold increase from August to 165,839 tons, customs data showed on Tuesday. That represented the highest monthly volume this year.

Among other industrial metals, aluminum fell 0.3% to $2,001 a ton; zinc added 0.5% to $2,669; lead was up 1.2% at $2,016; and tin added 0.4% to $19,300; while nickel retreated by 1.2% to $12,375. —