By Mai Nguyen
May 22 (Reuters) – The prices of most base metals fell on Monday on a lacklustre Chinese demand outlook and potential chaos in global financial markets after a surprise breakdown in negotiations over the US debt ceiling.
Three-month copper on the London Metal Exchange (LME) was down 0.8% at $8,183 a tonne at 0714 GMT while the most-traded July copper contract on the Shanghai Futures Exchange slipped 0.5% to 64,860 yuan ($9,383.54) a tonne.
Investors are concerned about the possibility of the US federal government falling behind on its debt payments, which could trigger a default and spark chaos in financial markets as well as a spike in interest rates.
The demand outlook in top consumer China was also bearish across many metals.
“Looks like the debt ceiling in the US is not going to be lifted in time,” one metals trader said, Buy Online Casino Script adding that China is assessing the metals demand after last week’s LME seminar in Hong Kong.
LME aluminium was down 1.3% at $2,253.50 a tonne, zinc lost 0.9% to $2,456.50, tin slid by 1% to $25,210, nickel was down 0.4% at $21,200 and lead rose 0.1% to $2,094.50.
SHFE aluminium fell 1.2% to 18,005 yuan a tonne, zinc declined 1.8% to 20,310 yuan, tin lost 0.2% to 197,450 yuan and nickel rose 1.8% to 166,310 yuan while lead gained 0.1% to 15,375 yuan.
However, copper prices were supported by low inventories, with stockpiles in SHFE warehouses <CU-STX-SGH> falling to their lowest in more than four months at 102,511 tonnes.
Inventories in Chinese bonded warehouses <SMM-CUR-BON> also declined.
The Yangshan copper premium <SMM-CUYP-CN> rose to a seven-week high of $35 a tonne on Friday, indicating increased demand to import the metal into China.
“The arbitrage for copper opened quite a few times last week, so onshore Chinese were buyers of physical material,” the metals trader said.
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($1 = 6.9121 yuan) (Reporting by Mai Nguyen in Hanoi Editing by Sherry Jacob-Phillips, Sonia Cheema and David Goodman)
