By Mai Nguyen
Oct 12 (Reuters) – London copper prices fell on Tuesday, weighed down by worries of lower demand as rising electricity prices raised concerns that downstream consumers would be forced to cut production.
Three-month copper on the London Metal Exchange CMCU3 fell 1.8% to $9,367.50 a tonne by 0436 GMT, while the most-traded November copper contract on the Shanghai Futures Exchange SCFcv1 edged up 0.1% to 69,630 yuan ($10,791.00) a tonne, tracking overnight gains in London.
LME aluminium CMAL3 declined 1.2% to $3,028.50 a tonne, zinc CMZN3 was down 0.8% at $3,204 a tonne and tin CMSN3 decreased 1.6% to $35,800 a tonne.
ShFE aluminium SAFcv1 rose 1.4% to 23,355 yuan a tonne, zinc SZNcv1 advanced 1.9% to 23,635 yuan a tonne, while tin SSNcv1 dropped 2.2% to 276,890 yuan a tonne.
Power prices have risen to records in recent weeks, driven by energy shortages in Asia, Europe and the United States, as the pace of economic recovery from the pandemic has supercharged energy demand.
“Higher electricity prices and lower factory operating rates mean lower demand for raw materials,” said a Singapore-based metals trader.
The People’s Bank of China withdrawing liquidity also dented sentiment, he said. China’s central bank drained a net 90 billion yuan on Tuesday.
Property giant China Evergrande 3333.HK potentially missing another debt payment also hit market confidence in the Chinese real estate sector, which consumes a large amount of metals.
However, further falls in metals prices were cushioned by worries of a disruption in metals production due to the same energy crisis as well as rising interest in owning metals as a hedge against inflation.
“This is a retrace for a move higher. Queues that have built up in order books still need to be fulfilled,” said the trader.
FUNDAMENTALS
* Chile’s state miner Codelco will produce 2% to 3% more copper this year than it had previously expected, its chairman said.
* China’s major copper smelters in September kept output flat month-on-month due to maintenance and power curbs, Antaike said on Monday.
* For the top stories in metals and other news, click
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($1 = 6.4526 yuan)
(Editing by Subhranshu Sahu)
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