Copper futures slid again in London on Friday after rising sharply in the previous session, as persistent worries about demand in China returned to weigh on investors.
The red metal started the session higher, supported by Chinese equities which stayed in positive territory. Analysts said the relief rally lost momentum as short-covering fizzled out and market attention drifted back to concerns around the underlying supply and demand picture.
“The recovery in commodity prices looks fragile with concerns over China’s growth still weighing on market activity,” said ANZ Research.
The London Metal Exchange’s three-month copper contract was down 1.2 per cent at $US5,080 a metric ton in afternoon European trade, having hit a nine-day high earlier in the session at $US5,155 a ton.
On Thursday, copper prices jumped more than 4 per cent as stocks in China closed strongly higher for the first time in five sessions. The moves into equity assets supported a broader move into other so-called risk assets, such as oil and copper.
Investors had battled fears about China’s slowing economy in recent weeks following a series of economic upsets that sparked global market volatility.
Looking ahead, however, some analysts think copper prices are likely to continue falling.
“With the fundamentals generally bearish we would see any strength as a counter trend move,” said William Adams, head of research at Fast markets.
Among other base metals, aluminum was trading up 0.6 per cent at $US1,570 a ton, zinc was up 2.9 per cent at $US1,802 a ton, nickel down 0.7 per cent at $US9,985 a ton, lead was up 0.6 per cent at $US1,688.50 a ton and tin was 1.5 per cent higher at $US14,100 a ton.
source: Perth now