Copper prices continued to fall on Friday following China’s intervention to cool surging coal prices.
Copper for delivery in December fell 1% on the Comex market in New York, touching $4.5155 per pound ($9,934 per tonne).
[Click here for an interactive chart of copper prices]
China’s commodities markets tumbled on Wednesday, led by sharp falls in thermal coal prices, after the state planner said it was considering intervention to cool record prices of the fuel that is vital to power the world’s second-biggest economy.
“Oil and gas prices are not coming down to the same extent as coal. We think that energy prices are high and will stay high for the time being and put pressure on metals producers again,” said analyst Daniel Briesemann at Commerzbank in Frankfurt.
“We expect to see higher metals prices going forward. We think the supply situation will deteriorate further before it gets better.”
While the premium of cash LME copper over the three-month contract has eased to $247 a tonne from a peak of over $1,000 on Monday, LME inventories remain very low.
On-warrant LME stocks, those not earmarked for delivery, have tumbled by over 90% since mid-August.
(With files from Reuters and Bloomberg)