Metals plunge to multi-year lows
Published: November 23, 2015 3:44 pm
23 November 2015, Nirapad News: London copper sagged to a new 6-1/2-year low on Monday, with other metals near their own multi-year troughs, as China’s slowing factory demand pushes more supply onto global markets and the dollar strengthens against a slew of other currencies.
Base metals have been punished on one hand by slowing economic growth in top user China, and on the other by a strong dollar that has cut the buying power of other currencies ahead of an expected US interest rate hike in December.
Metals tied to China’s huge steel sector were especially hard hit on Monday, with London zinc and London nickel plunging nearly 4 percent and more than 5 percent, respectively.
Demand was unlikely to pick up ahead of year-end, as producers and manufacturers conserve cash flow, said analyst Helen Lau of Argonaut Securities.
Three-month copper on the London Metal Exchange (LME) slid two per cent to $4,489.50 a tonne by 0310 GMT, having earlier struck its weakest since May 2009 at $4,461.50.
Shanghai nickel fell further, going limit down at 6 per cent on concerns that China’s steel glut would hit other steel-making materials. Meanwhile, Shanghai zinc erased early gains to turn flat, shrugging off last week’s news about planned huge supply cuts in China.
New steel and aluminium contracts being launched by the LME on Monday are expected to attract initial interest from customers, but building up strong liquidity in the current bear market may be challenging.