Copper headed for steepest weekly drop since January in the week through Friday on fresh concerns about a slowdown in Chinese demand and abundant supplies, while Nickel was set for its sharpest weekly fall since September 2011 amid a boader slide in base metals.
Three-month copper dropped 0.5% on the Londoan Metals Exchange (LME) at $6,223 a tonne at 1020 GMT. The metal, which also tracks the health of the global economy, has lost 3% so far this week — the biggest weekly drop since January — as fears on China’s slowing consumption intensified.
Latest data revealed imports of unwrought copper and copper alloy by China in the first four months of the year dropped almost 15% to 1.35 million tonne from a year ago. China accounts for roughly 40% of the world’s refined copper demand. Prices of other base metals, too, have been affected by good supplies and easing Chinese demand, as the world’s second-largest economy and largest metal user is facing a broader slowdown.
According to the International Monetary Fund, China, having experienced its worst economic growth in 24 years in 2014 at 7.4%, could see its expansion sliding further to 6.8% in 2015 and 6.3% in 2016.
Latest data also showed China’s factory activity contracting for a third straight month through May on a plunge in domestic and export orders. The flash HSBC/Markit PMI for China dropped to 49.1 in May, also recording the fifth contraction in activity in six months.
Nickel shed 1.7% by 10.20 GMT on Friday to $12,785 a tonne amid stocks hitting a record 446,868 tonne on LME.
The metal, used in the making of stainless steel, has declined by over 8% for the week through Friday and is poised for its steepest weekly plunge since September 2011. Adequate stocks have reflected in discounts, with those for the cash contract over the 3-month future widening to around $43 a tonne now from almost $30 in late April.
Aluminium, too, eased to $1,767 a tonne from $1,773 at the end of Thursday’s trading, hitting its lowest since mid-April. Lead dropped to $1,961 from $1,972, while zinc shed 0.7% to $2,175 a tonne.