LONDON- Copper prices retreated on Tuesday, weighed down by worries that a power crisis and slower economic growth in top metals consumer China will erode demand.
Three-month copper on the London Metal Exchange had eased 1.2 percent to $9,748 a ton after rising by 1.7 percent on Monday.
High power prices and efforts to curb emissions in China have dampened output of some metals, but analysts are concerned that fabricators will also be hit, undermining consumption.
“There are a lot of uncertainties around, including how severe the demand destruction will be from the power crunch both in China and elsewhere in the world,” said Wenyu Yao, a senior commodities strategist at ING Bank.
“So, in the short term the market will remain very volatile until things become clearer.”
Low inventories have supported copper prices, which hit a five-month peak of $10,452.50 a week ago, but Chinese research house Antaike said more material may soon become available.
“The congestion of global shipping routes has been alleviated to some extent. In-transit stocks, commercial stocks and other hidden stocks may become dominant,” it said in a note.
Meanwhile, Shanghai aluminum hit on Wednesday a two-month trough while the London contract fell to a seven-week low as a drop in coal prices eased trader concerns over supply shortage of the metal. – Reuters
