Fears of slowing demand hit metals

Print this page Posted on : 06-14-2007 by recycleinme.com

Industrial metals extended recent losses on Wednesday on fears of slowing demand and as negative sentiment spilled over from equity markets.

Benchmark three-months copper futures on the London Metal Exchange fell to $7,075 / 7,085 per tonne by 1005 GMT, down $100 or 1.4 per cent from Tuesday’s close. At its current level, copper is more than 5 per cent cheaper than it was at the start of June.

Copper for nearby delivery was trading at a premium of $80 / 85 a tonne to the bench-mark future.

Steel – making raw material nickel, which tumbled 6 per cent on Tuesday, continued to slide below $40,000. By 0936 GMT it was quoted at $39,150/39,350, down $700 from Tuesday’s closing price.

Nickel shot to a record peak of $51,800 in May from under $30,000 in November last year, and users of the metal have claimed such high prices are making it more difficult for them to profitably produce nickel-bearing stain-less steels.

Zinc was quoted at $3,555 / 3,575, down $155 or 4.2 per cent in response to an influx of stocks, BNP’s Thurtell said. Stocks rose 2,800 tonnes to 74,050, bucking a trend that has seen inventories fall by 87 per cent since mid-2005.

The fear of rising interest rates that has affected global financial markets had a knock-on effect on the LME.

US benchmark 10-year Treasury yields hit a five-year high on Wednesday on expectations that interest rates around the world will rise, weighing on sentiment.

Lead was down $65 at $2,260 / 2,270 and tin was down $200 at $13,750 / 13,850.

Source : Business Line