Base Metals Fall to Multiyear Lows



On November 10, all base metals except tin slumped to significant lows because of weak Chinese data. The LME (London Metal Exchange) three-month copper price has been falling for the past five trading sessions because of increasing strength of the US dollar.

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LME copper reaches a new six-year low

On November 10, copper fell by 0.8% and reached a new six-year low of $4,925.5 per metric ton. On August 26, copper had closed at a six-year low of $4,935 per metric ton—also due to the Chinese economic slowdown. The weak Chinese inflation data released on November 9 highlighted the slowing Chinese economy and dragged copper to a fresh six-year low, as shown in the graph above.

On November 10, LME three-month aluminum prices fell by 0.26% and closed at $1,508 per metric ton. Since the beginning of the month, aluminum has been performing well compared to other base metals because of a surge in its cancelled warrants.

LME nickel and zinc reach six-year lows

On November 10, LME nickel fell by 0.8% and reached a six-year low of $9,505 per metric ton. LME nickel has fallen in the past six trading sessions. Since the beginning of November, nickel has been in a falling trend and has lost 5.5%. LME zinc fell by 2.3% on November 10 and closed the day at $1,607 per metric ton. Zinc has been falling since October 12, the day after it rose by 10% because of production cuts from Glencore (GLEN).

LME lead fell by 1.5% and closed the day at $1,634 per metric ton. This is the lowest price level at which lead has closed in the past two months. LME tin was the only base metal that rose on November 10. LME tin rose by 1% and ended the day at $14,725 per metric ton.

The disappointing performance of base metals resulted in the fall of mining companies such as Freeport-McMoRan (FCX), Glencore (GLEN), and Alcoa (AA). Major base metal ETFs such as the SPDR S&P Metals & Mining ETF (XME) and the PowerShares DB Base Metals Fund (DBB) also fell on the day because of weak base metal prices.


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