Copper sinks to lowest since 2009 amid China gloom

“We can’t see anything at the moment that will come to the rescue for metals”.

In futures trade, copper for delivery in far-month April contract was trading higher by Rs 1.35 or 0.45% at Rs 300.30 per kg in a business turnover of 15 lots at Multi Commodity Exchange.

“I struggle to see any bullish catalysts in the near term… but there’s slightly calmer sentiment now only because the Chinese currency isn’t falling as sharply and the (Chinese) stock market although volatile has calmed down as well”.

Copper has dropped almost 7 per cent this month after sliding by about a quarter a year ago.

Last but not least, market analysts expect Beijing to pump more liquidity into the economy to help with recovery, which means the Yuan will depreciate, making Chinese exports more competitive.

Purchases of unwrought copper and copper products were the second highest ever in December, reaching 530 000 tons, customs data compiled by Bloomberg show.

LME three-month nickel, which was the worst performer on the LME in 2015 with losses of more than 40 per cent, tumbled to $US8,120 a tonne, the lowest since May 2003, before paring losses to close at $US8,220, a decline of 0.6 per cent. Glencore rose 9.4 per cent, the most since October, as the Swiss miner and trader rebounded from a six-day losing streak. Prices plumbed a new low since May 2009 at $US4,350 a tonne on Tuesday. All metals on the London Metal Exchange increased except for nickel and tin. “These companies are leveraged to good news”. The Bloomberg Commodity Index, a measure of returns for 22 raw materials, is near a record low.

Three-month aluminium fell 2.1 per cent to $US1,461 a tonne.

“It’s more of a knee-jerk reaction to the concerns that China is obviously slowing, and concerns about the stock market”, Jonathan Barratt, chief investment officer of Ayers Alliance Securities, said by phone from Sydney.

But analysts say the biggest problem for copper and other base metals is oversupply.

Zinc fell 1.7 percent to $1,482 a tonne, lead lost 1.2 percent to $1,601, tin slipped 0.5 percent to $13,675 and nickel was down 3.3 percent at $8,270.