By Jan Harvey
LONDON, Feb 9 (Reuters) – Copper fell on Friday and other metals broadly retreated as stock markets extended this week’s sharp slide, with the prospect of rising U.S. interest rates denting hopes that surging economic growth would drive up demand.
Consequent selling of cyclical assets sent copper to an eight-week low at $6,750 and put it on track to fall 4.1 percent this week, potentially its largest weekly drop since 2016.
A jump in inventories of the red metal, chiefly used in construction, also weighed on prices.
“(Metals) have definitely been pulled down by the turmoil in the stock markets,” Commerzbank analyst Daniel Briesemann said. “There were high bets on rising prices, so there is still some room for correction and to take profits. The cyclical aspect is also playing its part.”
Overall optimism over the economic outlook is likely to stop industrial metals from falling too far, however, he said.
Lead, the biggest loser among the major industrial metals, has fallen 7 percent this week.
* LME COPPER: Three-month copper on the LME ended down 1.3 percent at $6,755 a tonne.
* COPPER STOCKS: Copper stocks in LME-registered warehouses rose 20,125 tonnes or 6 percent, data showed on Friday, and are up by two-thirds in the last three weeks. On-warrant stocks – those not earmarked for delivery – have almost doubled in the same period to their highest since September 2016.
* SHANGHAI INVENTORIES: Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 7.8 percent to 186,132 tonnes from last Friday, the exchange said.
* FINANCIAL MARKETS: A four percent drop in Chinese shares dealt reeling world markets a fresh blow as worries over rising borrowing costs and soaring volatility put them on course for their worst week since the height of euro zone crisis.
* ALUMINIUM: Aluminium slid 2.2 percent to end at a seven-week low of $2,123 a tonne.
* LEAD: Lead fell 1.1 percent to $2,534 a tonne, with traders cashing in gains after its recent rally to 6-1/2 year highs.
* NICKEL CONTRACT: The Shanghai Futures Exchange said it will quintuple the intraday transaction fee on its nickel futures contract for May delivery with effect from Monday.
* OTHER METALS: Nickel fell 1.2 percent to $12,970 a tonne, while zinc slipped 1.1 percent to $3,385 and tin lost 1.4 percent to $21,025.
(Reporting by Tom Daly in Beijing; Editing by Kirsten Donovan and David Evans)
Sorry we are not currently accepting comments on this article.