Copper Slides on Weak Chinese Economic Data, Easing Supply Fears
August 14 2018 - 10:17AM
Dow Jones News
By Amrith Ramkumar and David Hodari
Copper prices fell near a fresh year-to-date low on Tuesday
after data showed fixed-asset investment in China slowed to a
nearly two-decade low in the first seven months of the year and
Bloomberg News reported that BHP Billiton Ltd. could avoid worker
strikes at the world's largest copper mine.
Copper for September delivery slumped 1.7% to $2.6835 a pound on
the Comex division of the New York Mercantile Exchange. Prices are
down almost 20% from their June four-year highs, hurt by worries
that trade tensions between the U.S. and China will accelerate a
Chinese economic slowdown, weakening demand for materials used in
construction and manufacturing.
China is the world's largest commodity consumer, accounting for
about half the world's copper demand. Tuesday's data showed
spending on factory machinery, public-works projects and other
fixed-asset investments in China's nonrural areas grew 5.5% in the
January-July period from a year earlier, matching a record low from
1999.
"The response of metals prices to the data from China is
correspondingly negative," Commerzbank analysts said in a note to
clients.
Other industrial metals including aluminum, tin and lead also
fell on the London Metal Exchange.
As investors have grappled with the prospect of lower copper
demand, data has pointed to steady production and disruptions from
worker strikes that boosted copper last year haven't
materialized.
Copper's losses accelerated Tuesday after Bloomberg reported
that the union at Chile's Escondida mine is optimistic about
reaching a wage agreement with BHP, potentially ending the prospect
of a strike that could lower production. A 44-day strike at
Escondida last year helped support copper prices.
Among precious metals, gold for December delivery edged up 0.4%
to $1,203.80 a troy ounce, boosted by declines in the dollar. The
dollar surging has pushed gold to its lowest level since January
2017 by making the yellow metal more expensive for overseas
buyers.
On Tuesday, the WSJ Dollar Index, which tracks the dollar
against a basket of 16 other currencies, fell 0.2% after closing at
a fresh 15-month high Monday.
Write to Amrith Ramkumar at amrith.ramkumar@wsj.com and David
Hodari at David.Hodari@dowjones.com
(END) Dow Jones Newswires
August 14, 2018 11:02 ET (15:02 GMT)
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