LONDON: Copper prices fell on Tuesday as rising energy prices raised fears that the global economic recovery could be thwarted, although there are signs that metal supplies are curtailing limited losses.
Benchmark copper on the London Metal Exchange (LME) fell 0.9% to $ 9,458 a tonne at 4:14 pm GMT, posting a three-day gain. Prices rose to a record $ 10,747.50 in May and then fell as the global economic recovery began to slow. However, as analysts at JPMorgan note, bottlenecks in logistics have helped reduce copper stocks to “historically low” levels in regions where the metal is used.
“This remains an upside risk in the near term,” they said, even though supplies remained strong.
“We remain bearish on prices and project an average price of $ 8,900 per tonne in 4Q21, with prices falling back to $ 8,200 per tonne in 4Q22,” they said.
MARKETS: Stock markets fell the hardest in Asia as authorities from Beijing to Delhi tried to fill a gaping power gap.
CHINA CONSTRUCTION: China Evergrande Group missed its third round of bond payments in three weeks, fueling market concerns about the spread of the infection.
CHINA EXPORTS: China’s export growth likely slowed in September, a Reuters poll showed.
DOWNGRADE: The International Monetary Fund has cut growth forecasts for the United States and other major industrial powers.
STOCKS OF COPPER: Copper stocks in LME-registered warehouses fell to 65,500 tonnes from nearly 240,000 in August. Stocks in warehouses at the Shanghai Futures Exchange (ShFE) are close to a 12-year low at 50,062 tonnes, while stocks in Chinese bonded warehouses have nearly halved since July.
COPPER DISTRIBUTION: The cash copper premium on the three-month LME contract rose to nearly $ 70 per tonne, the highest since 2015. The premium indicates a limited supply of metal.
CHINA PREMIUM: Surcharges on copper imports from China to Yangshan rose to $ 130 per tonne, the highest since 2014, indicating strong Chinese demand for overseas metal.
LEAD / ZINC: The global lead and zinc markets will be slightly congested this year and next, the International Lead and Zinc Research Group (ILZSG) said.
OTHER METALS: aluminum on the London Metal Exchange rose 0.2% to $ 3,068.50 a tonne, zinc rose 0.4% to $ 3244, nickel fell 0.7% to $ 18,980, lead fell 1 1% to $ 2202, while tin rose 0.2% to $ 36,445.