The prices of most base metals fell on Monday on lacklustre Chinese demand outlook and potential chaos in global financial markets amid a surprise breakdown in the US debt ceiling negotiations.
Three-month copper on the London Metal Exchange was down 1 percent at $8,172.50 a ton, while the most-traded July copper contract on the Shanghai Futures Exchange slipped 0.7 percent to 64,750 yuan ($9,367.63) a ton.
Investors are concerned about the possibility of the US federal government falling behind in paying off its debt, which could trigger a default and likely spark chaos in financial markets and a spike in interest rates.
Demand outlook in top consumer China was also bearish across many metals segments.
“Looks like the debt ceiling in the US is not going to be lifted in time, a metals trader said, adding that China is assessing the base metal demand after last week’s LME seminar in Hong Kong.
LME aluminum was down 1.1 percent at $2,259.50 a ton, zinc declined 1.7 percent to $2,436.50 a ton, tin shed 1.4 percent to $25,100 a ton, nickel fell 0.9 percent to $21,095 a ton and lead decreased 0.3 percent to $2,086.50 a ton.
SHFE aluminum fell 1.4 percent to 17,975 yuan a ton, zinc declined 1.9 percent to 20,280 yuan a ton, tin lost 0.6 percent to 196,660 yuan a ton, while nickel rose 0.9 percent to 164,830 yuan a ton and lead increased 0.1 percent to 15,375 yuan a ton.
However, copper prices were supported by low inventories, with stockpiles in SHFE warehouses falling to 102,511 tons, the lowest in more than four months. Inventories in Chinese bonded warehouses also declined. – Reuters
