LONDON (Reuters) - Copper prices fell to a five-week low on Tuesday as fears that weak global growth will reduce demand combined with news that a large smelter in India could restart, lifting supply.
Investors were gloomy after Chinese President Xi Jinping in a speech offered no measures to boost the economy of the world’s largest metals consumer, which recent data has shown is slowing.
Without new stimulus measures, metals prices were likely to fall, said Deutsche Bank analyst Nick Snowdon. “The overall picture (for China’s economy) remains one of deterioration,” he said.
COPPER: Benchmark copper on the London Metal Exchange (LME) was down 1.1 percent at $6,057 a tonne at 1208 GMT after touching $6,032, the lowest since Nov. 14.
The metal used in power and construction is down 16 percent this year, hit by weaker Chinese growth and a U.S.-China trade dispute.
GLOBAL MARKETS: World stocks also tumbled as worries over the global economy rippled through markets ahead of an expected U.S. interest rate rise on Wednesday.
PESSIMISM: Investor confidence in the global growth outlook is the lowest in a decade, a Bank of America Merrill Lynch survey showed on Tuesday.
CHINA: China’s industrial output rose the least in nearly three years in November and retail sales grew at their weakest pace since 2003, data last week showed.
YUAN: Better news for metals, however, came from offshore yuan derivatives which signal depreciation pressure on China’s currency has eased. A weaker yuan makes metals costlier for Chinese buyers and helps push prices lower.
INDIA SMELTER: An Indian court ruling on Monday moved a 400,000 tonne-a-year copper smelter operated by Vedanta Ltd closer to being allowed to restart.
SPREAD: In a signal that supply tightness was easing, cash copper flipped from a premium to a $32.50 discount against the three month contract.
STOCKS: However, copper inventories in LME-registered warehouses at 122,000 tonnes remain near the lowest since 2008.
NICKEL: The global nickel market deficit widened to 19,600 tonnes in October, the International Nickel Study Group (INSG) said.
PHILIPPINES: A Philippine government panel overseeing operations at the country’s 41 mines has deferred a recommendation to lift a six-year-old moratorium on new mining projects.
OTHER METALS: LME aluminium was up 0.1 percent at $1,944 a tonne, zinc was 0.5 percent lower at $2,526.50, nickel had lost 0.5 percent to $10,935, lead gained 0.5 percent to $1,941 and tin was down 0.7 percent at $19,220.
Additional reporting by Melanie Burton in MELBOURNE and Tom Daly in BEIJING; editing by David Evans