September 29, 2015 / 3:02 AM / 5 years ago

METALS-London copper strikes 1-month low as Glencore selloff spooks market

* Glencore shares sink around 28 pct in Hong Kong, track London

* Coming up: euro zone consumer confidence at 0700 GMT (Adds comment, detail; updates prices)

By Melanie Burton

MELBOURNE, Sept 29 (Reuters) - London copper hit its weakest in a month on Tuesday, slipping towards last month’s six-year trough as concerns about weak demand from China hammered mining equities and eroded support for metals.

Shares of Glencore’s Hong Kong listing fell 28 percent in Asian trade with the gloom spilling into commodity and mining shares elsewhere. Shares of Noble Group dropped as much as 15 percent, while BHP fell more than 6 percent

But London listed shares halted their slide with several brokers saying worries over the commodities and mining company’s debt pile were overdone.

“When Glencore has a negative spin, people get nervous,” said Chief Investment Officer Jonathan Barratt of Ayers Alliance in Sydney.

“We’re getting close to August lows. In my mind, you’re buying into weakness. There is growth in the global economy. But if copper dips through here it could fall another 5-10 percent.”

Three-month copper on the London Metal Exchange slipped by 0.3 percent to $4,961.50 a tonne by 0735 GMT, having struck its weakest since late August at $4,915.50 a tonne. The metal has been sidling towards its cheapest since July 2009, below $4,855.

Shanghai Futures Exchange copper fell 2.5 percent to 37,760 yuan ($5,935). Other ShFE metals were also weak, with ShFE nickel dropping 2.6 percent.

Shanghai markets will close from Thursday for a week for its mid-autumn festival.

Worries that Glencore may cut inventories of metal, like aluminium and zinc, raising supply, was also dragging on prices.

China announced more infrastructure spending as it looks to shore up growth, approving subway projects in three cities including Beijing, Tianjian and Shenzhen worth a total 464.77 billion yuan ($73.04 billion).

Adding to the dour sentiment, profits earned by Chinese industrial companies declined at the sharpest rate in four years in August as costs kept rising and product prices kept falling, according to official data that adds to signs of weakness in the world’s second largest economy.

Reflecting pressure across the metals industry, Alcoa Inc’s decision to split in two will sharpen pressure on one of the world’s top aluminum producers to cut costs or close unprofitable smelting capacity, as worries over China’s output mounts and prices hit multi-year lows.

U.S. consumer spending grew briskly in August and a key measure of inflation firmed a bit, signs of strength in America’s domestic economy that could lead the Federal Reserve to tighten interest rates despite weakness abroad.

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin ($1 = 6.3620 Chinese yuan) (Reporting by Melanie Burton; Editing by Joseph Radford and Biju Dwarakanath)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below