Saturday, 19 Jan 2019

China sends the metal market in freefall

A new round of tensions around a commercial war is sending to metale markets It’s a plummeting fall.

He copper It went through the level of US $ 6,000 per metric ton for the first time in a year and is heading for its biggest monthly decline since 2015. Zinc, lead, nickel and platinum lost more than 2% and the gold It plummeted to a minimum of one year.

Metals are accelerating a sell-off that began in early June on fears that the trade dispute between China Y U.S affect economic growth and slow down the demand for raw materials.

On Thursday, China accused the US authorities of making false accusations and reacted to claims that President Xi Jinping is blocking negotiations with the United States.

“Uncertainty dominates at this stage and investors remain very cautious with all the trade protectionism and threats of retaliation that we are seeing,” Casper Burgering, a senior economist in the ABN Amro Bank sector, said by telephone from Amsterdam. “You can clearly see that reflected in copper prices today.”

Metal prices plummeted just after 8 a.m. in London, which led traders to speculate that the movement was driven by technical funds, also known as commodity market advisors (CTAs), adding short positions at the start of the European day.

“Given the timing of these movements, it would appear that a CTA offer has resurfaced,” Alastair Munro, an analyst at Marex Spectron in London, said by email. This week, speculative copper short positions have risen to the highest level since their peak in January 2016, he said.

The rise in tensions caused the yuan to fall against the dollar, putting more pressure on buyers in China, the world’s largest consumer of industrial commodities. The currency is trading near its lowest level in a year.

Copper fell 2.3% to US $ 6,006.50 a tonne at 12:12 p.m. in the London Metal Exchange (LME by the acronym in English). Prices have fallen by 18% since the beginning of June, approaching the definition of a bear market.

Zinc and lead lost more than 3%, while nickel dropped 2.2%. Aluminum was down 0.4 percent, while inventories in the LME increased for the ninth day, marking the most extensive period since 2009.

All precious metals fell in London, led by platinum, which plummeted to 2.5% to its lowest level since December 2008.

Gold sank to its lowest level in a year as Federal Reserve Chairman Jerome Powell’s comments on employment and inflation help keep expectations of another interest rate hike in September.

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