Copper price set for worst week since 2022 as China Plenum disappoints
Copper prices have retreated from a record hit in May on concerns about the strength of demand in China.
Iron ore futures in China rose to their highest in more than four months on Tuesday on supply uncertainties expected to emerge during the first quarter of next year.
The most traded iron ore futures contract on the Dalian Commodity Exchange, for May 2020 delivery, soared as much as 3.2% to 662 yuan ($94.05) per tonne in morning trade, the most since Aug. 7. It jumped 2.96% to 661 yuan per tonne as of 0330 GMT.
Prices for spot cargoes of benchmark iron ore with 62% iron content for delivery to China, also tracked robust futures market and rose to $93 per tonne on Monday from $89.50 in the previous session.
“The surge in iron ore prices was mainly driven by supply concerns from foreign miners in the first quarter next year,” said Tang Bingqing, an analyst with Founder CIFCO Futures, referring to Brazilian miner Vale SA lowering production outlook and the upcoming expiry of mining leases in India.
Meanwhile, demand prospects for construction steel products and steelmaking raw materials were improved as the latest Chinese Communist Party conference reiterated the need to strengthen infrastructure constructions, and did not mention real estate controls, Tang added.
Construction steel rebar on the Shanghai Futures Exchange , for May 2020 delivery, jumped 1.0% to 3,528 yuan per tonne.
January hot-rolled coil contract, used in cars and home appliances, rose 0.7% to 3,690 yuan per tonne.
Shanghai stainless steel futures, for February 2020 delivery, edged up 0.2% to 14,010 yuan per tonne.
Other steelmaking ingredients were mixed. Dalian coking coal, for January 2020 delivery, inched down 0.3% to 1,243 yuan per tonne while Dalian coke gained 1.2% to 1,928 yuan per tonne.
China’s producer prices fell in annual terms for the fifth consecutive month in November, while consumer prices spiked as food costs climbed, data showed on Tuesday, complicating policymakers’ efforts to boost demand as economic growth slows.
($1 = 7.0389 Chinese yuan)
(By Min Zhang; Editing by Shounak Dasgupta)
Comments