METALS-Copper extends losses on worries about China property, growth
(Adds analyst comment)
LONDON, Oct 6 (Reuters) – Copper prices slid on Wednesday on worries that the troubled Chinese property sector will further curb Chinese economic growth and metals demand.
Three-month copper on the London Metal Exchange had dropped 1.6% to $9,025 a tonne by 1030 GMT after it gave up 0.9% on Tuesday.
Volatility rose due to the LME options expiry on Wednesday and thin volumes since China is on holiday from Oct. 1-7, a trader said.
Construction is a major driver of copper demand and other Chinese property companies have seen their bonds battered by uncertainty surrounding debt troubles at China Evergrande .
“That (Evergrande debt) issue is weighing on the market because that probably will have an impact on construction and industrial activities from a sentiment perspective,” said Xiao Fu, head of commodity market strategy at Bank of China International.
“The sentiment drag and the power constraints are likely to curb growth, but we’re not expecting a ‘falling off the cliff’ scenario, just slower growth in the coming months.”
While sentiment has been knocked, actual consumption of base metals in construction will still continue due to the large number of housing projects ongoing, although at a slower pace, Fu added.
“The projects that Evergrande started will likely be completed, although it may take longer, and at the late stage of construction, base metals are actually used more.”
Inflation worries are also hitting wider financial markets after oil prices hit their highest in seven years.
* LME aluminium eased 1% to $2,892.50 a tonne, nickel was barely changed at $18,120, zinc dropped 0.7% to $3,025.50, lead dipped 0.1% to $2,149 and tin gained 1.2% to $35,500
* The implicit market balance in the global nickel market is a surplus of 76,000 tonnes in 2022 and a deficit of 134,000 tonnes in 2021, the International Nickel Study Group said on Wednesday.
Peru’s government reached an agreement with MMG Ltd’s Las Bambas mine and a local community to avoid road blockades that have threatened production at the huge copper mine.
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