Copper hit by slowing demand, strong dollar
2015-09-29 
Shanghai and London copper futures were mixed Friday as investors remained concerned about declining demand from China and ample supplies.
The most-traded copper contract on the Shanghai Futures Exchange (SHFE), for November delivery, closed at 39,000 yuan ($6,118.08) per ton Friday, up 150 yuan from Thursday. The November contract declined 1,920 yuan or 4.69 percent for the week.
The benchmark three-month copper on the London Metal Exchange closed down 0.6 percent at $5,023 a ton Friday, down 4.3 percent week-on-week. It was its biggest weekly drop since mid-January. Turnover was light due to holidays in Singapore, and ahead of China's holidays this week.
"We see copper at around $5,500 [by year-end] but that should be as good as it gets," Carsten Menke, analyst at Julius Baer, was quoted as saying by Reuters Friday. "There will be no drop in supply - there might be mine closures here or there but we expect mine production to grow and at the same time we don't see any region in the world that will ramp up demand growth."
The preliminary Caixin/Markit China manufacturing purchasing managers' index (PMI) fell to a six-and-a-half-year low in September, down from 47.3 in August, a preliminary Caixin survey showed Wednesday.
The economic downturn and strong dollar have both weighed on copper prices for the short term, according to a report by Xiamen-based Ruida Futures Friday. A strong dollar makes dollar-priced metals costly for non-US investors. Also, investors are cautious ahead of China's National Day holidays, the report said.
For other metals, Volkswagen's emissions scandal is likely to have a negative impact on platinum prices, which are already trading at a six-year low, according to a research note issued Friday by ANZ Banking Group.
Gold climbed to a four-week high after a US data report showed orders for business equipment have stalled, the note said.
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The most-traded copper contract on the Shanghai Futures Exchange (SHFE), for November delivery, closed at 39,000 yuan ($6,118.08) per ton Friday, up 150 yuan from Thursday. The November contract declined 1,920 yuan or 4.69 percent for the week.
The benchmark three-month copper on the London Metal Exchange closed down 0.6 percent at $5,023 a ton Friday, down 4.3 percent week-on-week. It was its biggest weekly drop since mid-January. Turnover was light due to holidays in Singapore, and ahead of China's holidays this week.
"We see copper at around $5,500 [by year-end] but that should be as good as it gets," Carsten Menke, analyst at Julius Baer, was quoted as saying by Reuters Friday. "There will be no drop in supply - there might be mine closures here or there but we expect mine production to grow and at the same time we don't see any region in the world that will ramp up demand growth."
The preliminary Caixin/Markit China manufacturing purchasing managers' index (PMI) fell to a six-and-a-half-year low in September, down from 47.3 in August, a preliminary Caixin survey showed Wednesday.
The economic downturn and strong dollar have both weighed on copper prices for the short term, according to a report by Xiamen-based Ruida Futures Friday. A strong dollar makes dollar-priced metals costly for non-US investors. Also, investors are cautious ahead of China's National Day holidays, the report said.
For other metals, Volkswagen's emissions scandal is likely to have a negative impact on platinum prices, which are already trading at a six-year low, according to a research note issued Friday by ANZ Banking Group.
Gold climbed to a four-week high after a US data report showed orders for business equipment have stalled, the note said.
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