Metals Update – 28 April

Cooper set for largest monthly loss since June 2022

On Friday copper prices, which are often used as a gauge of economic health, suffered their largest monthly loss since June 2022 due to weak demand from China, the top consumer, and global economic headwinds. Although the three-month copper contract on the London Metal Exchange increased by 0.3% to around 8600 USD/Tonne a tonne, it is notably down 4.3% throughout April.

Mixed demand indicators in China contributed to copper prices being under pressure throughout April, with construction activity stabilizing at 2022 levels but property sales turning lower once again.

The most-traded June copper contract on the Shanghai Futures Exchange increased by to 67,250 yuan ($9,722.70) a tonne, but it had fallen by 3% in March. LME Aluminium was nearly unchanged at  $2,320 a tonne, zinc rose 1% to $2,646, LME tin gained 2% to $26,385, and lead ticked up 0.8% to $2,115. Nickel fell 0.8% to $23,900. SHFE aluminium slid 0.5% to 18,475 yuan a tonne, lead edged down 0.2% to 15,255 yuan, while tin climbed 1.4% to 211,020 yuan, nickel rose 2.2% to 183,960 yuan, and zinc was up 0.2% at 21,265 yuan.

Iron Ore

Reports indicate that iron ore futures in Singapore are facing the biggest monthly decline since October due to demand uncertainties. The decline is attributed to China’s peak construction season from April to June, which has been weaker than expected. Iron ore prices have fallen by almost 17% in April as a result.

China Baowu Steel Group has warned that steelmakers will continue to face tough conditions this year. The China Iron & Steel Association has called for a curb on loss-making output due to disappointing demand and falling prices.

However, Vale SA, the world’s second-largest iron ore miner, believes that demand growth will exceed supply, although clients are taking a step back and reassessing China’s property market. Currently, iron ore is trading at $103.80 per ton, with Dalian futures remaining mostly unchanged and steel futures dropping in Shanghai.

Foenix Partners, 26 Curtain Road, London, EC2A 3NY