Copper prices have fallen to a three-month low as fears that weak global growth will reduce demand combined with news that a large smelter in India could restart, lifting supply.
Investors were gloomy after Chinese President Xi Jinping in a speech offered no measures to boost the economy of the world’s largest metals consumer, which recent data has shown is slowing.
Without new stimulus measures, metals prices were likely to fall, said Deutsche Bank analyst Nick Snowdon.
‘The overall picture (for China’s economy) remains one of deterioration,’ he said.
Benchmark copper on the London Metal Exchange closed down 2.5 per cent at $US5,970 a tonne after touching $US5,955, the lowest since September 18.
The metal used in power and construction is down around 18 per cent this year, hit by weaker Chinese growth and a US-China trade dispute.
Investor confidence in the global growth outlook is the lowest in a decade, a Bank of America Merrill Lynch survey showed on Tuesday.
China’s industrial output rose the least in nearly three years in November and retail sales grew at their weakest pace since 2003, data last week showed.
Better news for metals, however, came from offshore yuan derivatives which signal depreciation pressure on China’s currency has eased.
A weaker yuan makes metals costlier for Chinese buyers and helps push prices lower.
An Indian court ruling on Monday moved a 400,000 tonne-a-year copper smelter operated by Vedanta Ltd closer to being allowed to restart.
In a signal that supply tightness was easing, cash copper flipped from a premium to a $US25.50 discount against the three month contract .
However, copper inventories in LME-registered warehouses at 122,000 tonnes remain near the lowest since 2008.
The global nickel market deficit widened to 19,600 tonnes in October, the International Nickel Study Group said.
The global lead market deficit narrowed to 25,600 tonnes in October and the zinc market deficit decreased to 43,400 tonnes, data from the International Lead and Zinc Study Group showed.
A Philippine government panel has deferred a recommendation to lift a six-year-old moratorium on new mining projects.
LME aluminium ended down 0.9 per cent at $US1,925 a tonne, zinc finished 0.8 per cent lower at $US2,520, nickel fell 1.4 per cent to $US10,835 and tin slipped 0.7 per cent to $US19,210.
Lead bucked the trend, closing up 2.2 per cent at $US1,973.