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After copper prices rose 2 percent on Tuesday, Reuters reported Wednesday that the red metal had continued its downward slide on the back of concerns about China’s economy.
After copper prices rose 2 percent on Tuesday, Reuters reported Wednesday that the red metal had continued its downward slide on the back of concerns about China’s economy.
As quoted in the publication:
Three-month LME copper closed 2.6 percent down at $4,935 a tonne, having hit a six-year low of $4,855 on Monday. The metal has lost 22 percent of its value this year.
“When investor sentiment is as poor as it is, prices can always go lower; but the reaction is overdone. (Copper) premiums in China have surged. Couple that with imports, with copper products output, none of it is looking like we should be panicking,” Capital Economics analyst Caroline Bain said.
Expectations that a weaker yuan would increase the cost of Chinese imports of refined copper have supported domestic prices in the world’s biggest metals consumer.
Meanwhile cash LME copper is trading near its highest premium against the benchmark price CMCU0-3 since February, indicating physical supply is not that easy to come by.
