23 Nov

Base Metals Tumbled on Weak Global Demand

WRITTEN BY Val Kensington

Base metals had a bad start last week

In the week ending November 20, base metals’ performance was disappointing. Almost all base metals were trading at their multiyear lows. The weak economic situation in China, global base metal demand worries, and the strong dollar pushed base metals down in the week ending November 20.

Base Metals Tumbled on Weak Global Demand

All base metals had a bad start last week because of the terror attacks in Paris. On November 16, copper fell to a six-year low on fears that the Paris attacks would negatively impact the global economy. Because of this, Comex copper lost more than 3% of its value in a single day on November 16. Along with copper, major base metals including nickel, zinc, and lead also fell to multiyear lows last Monday. On the London Metal Exchange, copper ended the week at its lowest levels since May 2009.

Weak property data from China and the US

The top two consumers of copper are China and the US. China accounts for 45% of global copper demand. According to US housing starts data released on November 18 by the US Department of Commerce, there was an 11% fall in housing starts in October from the previous month. As construction is one of the top copper-consuming industries, this weak property data kept the pressure on copper last week. In addition to this, the Chinese home sales data released by the National Bureau of Statistics also dragged copper prices down. Home sales in October increased only by 0.07% while sales rose by 0.2% in September. This represents the slowdown in the Chinese property market.

For more on the impact of property data on copper prices, please read Copper Extended Losses on Bearish Sentiment.

Freeport-McMoRan (FCX) fell by 5%, Glencore (GLNCY) fell by 1.6%, BHP Billiton (BHP) rose by 2.4%, and Rio Tinto (RIO) rose by 1.3%. The SPDR S&P Metals & Mining ETF (XME) and the PowerShares DB Base Metals Fund (DBB) fell by 1.6% and 4.3%, respectively.

Latest articles

Hexo (HEXO) had a hard time last week. A lot of headwinds pulled the stock down. However, the stock rose and closed with a gain of 17% on Thursday.

Elliott Management expects AT&T stock to reach $60.0 by the end of 2021 if it adopts the restructuring plan. The stock has a potential upside of almost 60%.

Tesla (TSLA) stock is having a strong run this month. After a weak start, the stock has closed with gains for nine consecutive trading days.

Chipotle is scheduled to report its third-quarter earnings on October 22. Despite the rise in the stock, Chipotle's earnings could drive the stock more.

The Cannabis 2.0 era has officially started. Now, Canadians can legally access a host of cannabis-infused products like beverages, vapes, and edibles.

Despite vaping concerns, Aurora Cannabis plans to introduce vape products in December. Reports of vaping-related illnesses started in late August.