A Closer Look: Why Did Base metals Disappoint?
Copper fell to a fresh six-year low
In the week ended November 13, base metals fell mainly because of the string of weak economic data from China and the strong US dollar. Except for LME (London Metal Exchange) Tin, all base metals in LME fell more than 2% in the week ending on November 13.
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LME 3M Copper fell by 3.3% and closed at $4,825 per metric ton in the week ended November 13. This fall in copper is because of demand pressure from world’s top copper consumer, China, and the strong US dollar.
Because of this situation, copper broke the multi-year low of $4,855 per metric ton created on August 24. The base metal reached a new six-year low of $4,787.50 per metric ton on November 13.
LME aluminum consolidated while LME nickel fell
In the week ended November 13, LME 3M Aluminum fell by 2.1% and closed at $1,491 per metric ton. The LME 3M Aluminum—after surging 3% in the week before—consolidated in the week ending on November 13.
LME 3M Nickel fell by 2.1% and ended the week at $9,425 per metric ton. The LME Nickel has been in a complete downtrend since the beginning of November. It fell 6.3%. Also, the bearish sentiment on base metals is weighing on nickel, causing it to trade very close to the multi-year lows created in August.
Meanwhile, LME Lead, in a downtrend since mid-October, fell by 3% and closed the week at $1,611 per metric ton. The LME Tin, consolidating since the beginning of the month, rose by 0.75% and ended the week at $14,750 per metric ton. Along with base metals, mining companies like Alcoa (AA), Rio Tinto (RIO), Freeport-McMoRan (FCX), and Glencore (GLEN) also fell last week. Additionally, the SPDR S&P Metals & Mining ETF (XME) fell by 6.2% in the week ending on November 13.