Subdued demand pushes copper to multi-month low
LONDON - Copper extended this week's decline on Wednesday, touching an almost six-month low on signs of subdued Chinese demand that analysts expect to pressure prices over the coming days.
Benchmark three-month copper CMCU3 on the London Metal Exchange (LME) was trading 1.6% down at $7 975 a tonne by 10:15 GMT, having touched $7 944 for its lowest level since November 29.
Copper hit a seven-month high of $9 550.50 in January after China removed its Covid curbs, but prices for the metal used in power and construction have since retreated.
"Copper has now given back all of its 2023 gains on weaker than expected Chinese demand, in what is normally a peak construction season, and subdued demand in the U.S. and Europe, with interest rate rises weighing on economic growth," said ING analyst Ewa Manthey.
"Hopes for higher demand from China have now faded with recent disappointing Chinese data underscoring a mixed picture for the world's biggest consumer of copper."
Copper is also weighed down by growing inventories in LME-registered warehouses MCUSTX-TOTAL, said Standard Chartered analyst Sudakshina Unnikrishnan.
"The much-anticipated rebound in China's copper imports and demand following the abrupt end to COVID lockdown policies has failed to materialise as of yet."
Rising LME inventories increased the discount on the cash contract against three-month copper MCU0-3 to $66 a tonne, its widest since early 1990s.
Among other metals, LME aluminium CMAL3 eased 0.7% to $2 211 a tonne after hitting its lowest since October 31 at $2 190.
Nickel CMNI3 lost 0.5% to $20 950 after touching $20,820 for its lowest since Sept. 5 while zinc CMZN3 was down 2.3% at $2 318.50 after sliding to $2 309, its weakest since October 2020.
Lead CMPB3, meanwhile, dipped by 0.8% to $2 055.5 and tin CMSN3 retreated by 1.6% to $23 940.
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