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Red Metal Hits the Bottom

After having the best last 3 months of 2016, London copper is now faced with a 3-month low as geopolitical problems drive investors away from the metal. Demands are lowering by the minute, giving copper its hardest blow since the January debacle. Concerns are also budding on China’s base metals demand as property prices stir uncertainties in the country.

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LME Copper received a denting blow of 2.1% loss at $5,568.50 a ton, making this the lowest the commodity has seen since somewhere around January; currently, copper manages to bounce back on the dip by increasing a substantial amount of 1.3% trading at $5,646 a ton. 

According to a recent report, investors are cautiously looking ahead on the possible economic strength China can produce amidst slow housing price, which is the main backbone on the bulk of the metals. While ABN Amro analyst Casper Burgering noted that "There is still some uncertainty in the market about geopolitical issues, and there is some risk aversion at this stage," and also adding "A small deficit (in copper) is expected this year and demand is very good ... but that hasn't benefited the metal."

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LME Aluminum, Lead, and Zinc

Another of LME’s metal loses 0.9% to $1,892 a ton, the aluminum recently hit a one-week high of $1,958.50. LME’s lead hit the lowest among the metals before losing to a three-month low of $2,098 closing at a 6% loss at $2,105. Zinc also loses as much as 3.8% at $2,252, marking its lowest since December where it traded as low as $2,105.

The Shanghai Futures Exchange reported that their steel-linked metals, shanghai zinc and nickel has been struggling to keep up with the pace on mounting China steel inventories amid record output from mills. On the brighter side, SHFE cuts the bleeding with its copper recovering a total of 1% at 45,840 yuan or $6,660 after experiencing a devastating loss of 45,110 yuan. An upbeat is also expected from the demand of steel used in early in the construction cycle.

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SHFE zinc was last trading at 21,025 yuan, losing as much as 2.7%, while SHFE nickel and lead were down by 2% also falling behind along LME’s slides. On the other hand, the growing property market in China grew in March on a monthly basis, making the second-largest economy in the world, a major lift in economic figures last month.

China’s Economy, US’ Economy

The outstanding first quarter report of the country was fueled by the industrial development the country has been doing, it also transcends on the orders picked up and steel output hit an all-time high. While the US homebuilding was down in March because of the sluggish growth in the manufacturing output in the last 7 months; this signals a bleak economic growth for the country’s first-quarter.

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