Copper under pressure on worries over weaker demand in China

By: | Published: October 24, 2018 9:26 AM

China said earlier this week that it will roll out more policies to support private companies, including measures to help them raise funds in capital markets.

Copper is used mostly in the power and construction sectors. (Representational photo: Reuters)

Copper prices were flat to lower on Wednesday, reflecting concerns over slower demand in top consumer China for the rest of this year as Beijing’s plans to reinvigorate the world’s second-largest economy may only kick in by 2019.

China said earlier this week that it will roll out more policies to support private companies, including measures to help them raise funds in capital markets, after data last week showed its third-quarter gross domestic product growth slowed to 6.5 percent, the lowest since the first quarter of 2009.

“This is a positive signal, however, it takes time for this political intention to be translated into actual policy,” said Chris Wu, analyst at CRU consultancy in Beijing.

“So far we haven’t heard any private manufacturers that have been supported by these so-called political intentions. We might be able to see… (them) next year.”

Copper is used mostly in the power and construction sectors, and Wu said there “hasn’t been a lot of orders from China’s State Grid” and Beijing’s latest round of anti-smog production cuts for this weinter would also limit construction activity in the current quarter.

Three-month copper on the London Metal Exchange was little changed at $6,195 a tonne by 0258 GMT. The most-traded copper contract, for December delivery, on the Shanghai Futures Exchange eased 0.4 percent to 50,110 yuan ($7,223) a tonne.

* CHINA SUPPORT: China’s state planner said it will step up support to stabilise jobs in regions most affected by the U.S.-China trade friction.

* CHINA ALUMINA: China’s alumina exports in September surged more than fivefold from August to 165,839 tonnes, the highest monthly volume this year.

* ALUMINIUM PRICES: LME aluminium rose 0.5 percent to $2,010 a tonne, but not far above 6-1/2-month lows reached last week. In Shanghai, aluminium gained 0.6 percent to 14,255 yuan a tonne.

* EQUITIES: Asian stocks edged up as a late round of buying helped Wall Street indexes pare most of their earlier panic-driven losses, although crude oil struggled near two-month lows after Saudi Arabia flagged possible supply increases.

* CERRO MATOSO: The Cerro Matoso nickel mine, owned by Australian miner South32, owes more than $56 million in unpaid royalties to Colombia, the country’s comptroller said.
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