Copper in London traded near the lowest level in 44 months, while futures in Shanghai tumbled for a fifth day to the lowest since July 2009 amid signs that demand is slowing in China.
China’s yuan forwards fell to a five-month low on signs the central bank is seeking to weaken the currency at a time of slowing growth and mounting credit concerns in the world’s second-largest economy. Data tomorrow may show the nation’s industrial output growth at 9.5 percent in February from 9.7 percent the previous month, according to a Bloomberg survey.
The contract for delivery in three months on the London Metal Exchange was little changed at $6,469 a metric ton at 5:02 p.m. in Tokyo after rising as much as 0.5 percent and sliding as much as 1 percent to $6,411, the lowest intraday level since July 2010. The metal lost 8.2 percent in the previous three days, the biggest such drop since October 2011.
“Concern over China’s slowing growth is the key driver for industrial metals,” said Kazuhiko Saito, a Tokyo-based analyst at commodities broker Fujitomi Co. “Everyone is looking at China for direction.”
Copper is down 12 percent this year, the worst performer among the six major base metals traded on the LME. The metal’s 30-day historical volatility, a measure of how much it swings, is 17 today, the highest since October, and compares with this year’s low of 8.7 on March 3, according to data compiled by Bloomberg.
“Certainly the short-term drivers of volatility in the industrial metals complex are centered around copper,” said Mark Keenan, the head of commodities research for Asia at Societe Generale SA in Singapore.
The metal’s 14-day relative-strength index has been below 30 since March 7, a level that suggests to some analysts using technical charts that the price may be poised to rebound. The index fell to 18 today, the lowest level since September 2011.
Investor scrutiny of China’s onshore bond market is intensifying after Shanghai Chaori (002506) Solar Energy Science & Technology Co. last week became the first company to default. Chaori’s failure is fueling speculation more companies may miss debt deadlines.
The Chinese economy will probably expand 7.5 percent this year, the slowest since 1990, according to a Bloomberg survey of economists. Chinese exports slid the most since 2009 last month, a report over the weekend showed. The country accounts for as much as 45 percent of copper demand, according to Barclays Plc.
Copper for June delivery on the Shanghai Futures Exchange lost as much as 5.4 percent, the daily maximum allowed, to 43,690 yuan ($7,113) a ton before closing at 44,500 yuan. Trading in futures contracts totaled more than 2.2 million contracts, exceeding yesterday’s 1.5 million contracts.
The contract for delivery in May on the Comex in New York fell 0.2 percent $2.9465 a pound. Trading volume was 157 percent more than the average for the past 100 days for this time of the day, data compiled by Bloomberg show.
On the LME, lead and tin declined, while aluminum, zinc and nickel were little changed.