-Glencore still monitoring zinc situation

LONDON: Copper prices tumbled on Thursday as worries about demand in top consumer China resurfaced after the country’s housing minister suggested moves were afoot to stabilise the property market, while a firm dollar reinforced negative sentiment.

The benchmark copper futures contract on the London Metal Exchange ended down 3 percent at $5,859 a tonne, its biggest one-day fall since September 2015. The price has slipped 5.7 percent from a 21-month high of $6,204 on Feb 13.

Traders say a generally higher dollar due to mounting speculation that the US Federal Reserve will raise interest rates next month was weighing on industrial metals because they are priced in dollars and cost more for holders of other currencies.

“The dollar is one element,” a copper trader said. “The other part is China. If they are going to try and cool the property market, it’s not good news for demand.”

China’s deputy housing minister Lu Kehua said preparatory work was being undertaken for a nationwide property tax, but did not give details.

In the shorter term however, supply disruptions in Chile and Escondida are expected to support prices, as is stronger manufacturing growth around the world.

“Demand looks like it’s going to accelerate over the next three months, the PMIs suggest solid growth and seasonally, metals markets normally see deficits in the second quarter,” said Goldman Sachs analyst Max Layton.

“Medium- and long-term loans for corporates, the government and households, so across the spectrum, improved dramatically.”

Chinese banks extended 2.03 trillion in net new yuan loans in January, the second-highest monthly tally on record and nearly double the December number.

Aluminium closed down 0.9 percent at $1,867 a tonne and zinc finished 2.6 percent lower at $2,790 a tonne.

Zinc prices are still nearly double the levels seen in January 2016 due to deficits arising from mine closures and shutdowns including at major producer Glencore.

“The market is tighter. There’s definitely a shortage of concentrate,” Glencore Chief Executive Ivan Glasenberg said at a briefing.

Glencore has said it would only restart capacity when the time was right. “It’s something we’re monitoring. There is no particular price target. We will make the

decision at the appropriate time.”

Lead closed 1.7 percent lower at $2,238 a tonne. Tin

was down 2.8 percent at $18,780 and nickel finished down 2.1 percent at $10,580 a tonne.—Reuters