Base metals fell
The base metals fell on November 6 because of the stronger US dollar and more concerns about the copper demand. The German industrial production data were released on November 6. The weak data caused base metals to fall.
Industrial production fell
The German industrial production data provide information on the change in the output that’s produced by mines, manufacturers, and utilities in Germany. A higher-than-expected reading or rising industrial production data indicate increased demand for industrial metals like copper. This could be positive for base metal prices. A lower-than-expected reading or falling industrial production data show a decrease in the demand for industrial metals. This causes base metals to fall. On November 2, the German industrial production for September was released. It fell 1.1%.
Concerns about the copper demand
The fall in industrial production data raised the concerns about the copper demand. Considering copper’s disappointing price movement this year, the major reason for copper’s downfall is the weak demand from the top consumer—China. Considering the fact that Germany is the third-largest copper consumer, the weak industrial production data prove base metals’ weak global demand situation.
The concerns about the copper demand put pressure on the prices of major mining companies and base metal ETFs. The major base metal mining companies like Freeport-McMoRan (FCX), Glencore (GLEN), and Alcoa (AA) are the largest producers of copper, zinc, and aluminium. They faced a bad year because of a fall in the global base metal demand. The major base metal ETFs like the SPDR S&P Metals & Mining ETF (XME) and the Power-Shares DB Base Metals Fund (DBB) were also affected by the global decrease in the demand for copper and the remaining base metals.