Copper tumbles to one-week low on Trump uncertainty
-Tin bucks the price downtrend across metals
LONDON: Copper prices tumbled to one-week lows on Thursday as uncertainty about US President Donald Trump’s future undermined expectations of a boost to infrastructure spending in the United States.
Benchmark copper on the London Metal Exchange was bid down 1.8 percent to $5,507 a tonne after failing to trade in official rings, from an earlier session low of $5,505.5.
“Anything that is industrially oriented has taken a bit of whack because there are doubts about whether Trump can push through his massive infrastructure spending plans,” said Cantor Fitzgerald analyst Asa Bridle.
Allegations that Trump tried to interfere with a federal investigation have raised the possibility of him having to resign from the presidency, putting his pro-growth policies at risk.
Also weighing on copper are higher stocks in LME warehouses, which this week have resumed an uptrend. At 340,350 tonnes, they are up more than 30 percent since the end of April.
Weaker April economic data from China, which accounts for nearly half of global consumption of industrial metals, is also a negative, analysts say.
The second quarter normally sees stronger demand for industrial metals ahead of the construction season in the third quarter, but traders say April has started off on a weak footing.
The lower US currency helped offset some of the negative sentiment because when it falls dollar-denominated commodities become cheaper for non-US firms, potentially boosting demand.
Focus is on large holdings of cash contracts and warrants in aluminium, zinc, lead, tin and copper, which could mean tighter supplies on the LME market.
The problem is particularly acute in tin where stocks have fallen to 2,045 tonnes - less than one percent of global consumption - and are at their lowest since 1989.
The backwardation or premium for the cash tin over the three-month is at $159 a tonne. It rose to a four-month high of $170 on Monday. Three-month tin was up 0.5 percent at $20,475.
Expectations of higher supplies from top ore producer the Philippines pushed nickel prices down to $9,030, the lowest since May 8. Three-month nickel was bid down 2.1 percent to $9,020 a tonne.
Aluminium fell one percent to $1,905 a tonne, zinc was bid 3.6 percent lower to $2,468 and lead ceded 2.5 percent to $2,057 a tonne.—Reuters
Shanghai copper slipsNew York cotton