Copper, nickel fall on turmoil in Greece

Industrial metals tumbled to the lowest in almost six years as moves by China to halt a stock-market collapse and Greece’s vote against austerity added to concern that global demand will ebb. Copper and nickel led the slump.

The London Metal Exchange’s gauge of six prices dropped two per cent to 2,558.3, the lowest since July 21, 2009. Copper for delivery in three months plunged 2.9 per cent to settle at US$5,590 a metric ton, the biggest decline since Jan. 14. Nickel fell 2.5 per cent to US$11,700 a ton.

China suspended initial public offerings and brokerages pledged to buy shares in measures aimed at halting the steepest three-week rout in stocks since 1992.

Greek Finance Minister Yanis Varoufakis quit his post hours after voters rejected further spending cuts and tax increases demanded by creditors.

Aluminum and lead dropped on Monday, approaching bear markets. Zinc and tin fell.

“The China risk now looks to be becoming a bigger issue than Greece,” Will Yun, commodity analyst at Hyundai Futures Corp. in Seoul, said in a telephone interview. “The issue is the stock bubble on top of cooling demand.”

The drop in the LME gauge on Monday was the biggest since May 19. China was the world’s largest metal consumer last year, followed by Europe, according to data from the World Bureau of Metal Statistics.

“The sharp selloff we are seeing in metals is attributable to growing concern about China and the destabilizing impact the recent plunge in local equity markets there may have on the broader economy,” Edward Meir, analyst at INTL FCStone Inc. in New York, said in an email.

Copper futures for September delivery declined 3.5 per cent to US$2.538 a pound on the Comex in New York. Floor trading was closed Friday for a public holiday.

Precious metals were more mixed as global economic news soured. Platinum slumped to the lowest since 2009, although gold advanced.

The price of platinum has slumped every quarter since June 2014, when miners ended a five-month strike in South Africa, the world’s largest supplier.

The prospect of slowing consumption comes as CPM Group says platinum mine output is set to gain this year amid plentiful inventories. Palladium, also used in catalytic converters, tumbled into a bear market last month.

“Today is the affect of the no-vote in Greece, and overall these metals have been hurt because of concerns about demand in Europe and China,” Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview. “We have seen most industrial metals trade weaker.”

Spot palladium fell 2.5 per cent to US$677 an ounce, heading for the biggest drop since May 11.

Gold for immediate delivery gained 0.3 per cent to US$1.172.60, erasing earlier declines of as much as 0.5 per cent. Prices rebounded as the dollar pared gains.