Base metals were mostly lower during Friday’s Asian trade, with the copper price falling below $6,500 per tonne at one point. Oil prices plunged after OPEC decided not to cut its production at a meeting yesterday, dragging the overall commodity complex with it.
Oil prices plunged after OPEC decided not to cut production at its meeting yesterday, leaving its 30 million barrels a day (mbpd) production limit unchanged. Brent crude oil subsequently slumped to a low of $72.78 per barrel, its cheapest since August 2010, while WTI hit $69.44, its lowest since June 2010.
The fall in oil prices dampened sentiments in the commodities market, with gold falling to the current $1,184.60 per ounce.
General sentiment surrounding metals is still weighed to the downside – a solid recovery is needed for any serious moves to take place. As well as the struggling eurozone and China, where interest rates were cut last week, there are signs that the US economy is stuttering now.
Today also marks the end of the month, so there may well be an upsurge in booksquaring and positioning activity towards the close. Next week sees December traded options declared on Wednesday.
In the metals, copper was quoted last at $6,514 per tonne, down $36 on yesterday’s close. Earlier this morning, it fell briefly below $6,500 to an eight-month low of $6,484.25 per tonne. In spreads, the benchmark cash/three-months was last showing a backwardation of $57.50.
“I guess its oil dragging all the commodities down, other than that, the Chinese are still happy to short copper,” said a Singapore-based trader.
Aluminium fell just $3 in price; the light metal has held up pretty steadily with widening spreads. Cash/threes are now at $31 backwardation, up from $25 on Thursday. Yesterday, inventories fell 10,025 tonnes to 4,332,400 tonnes, the lowest now since January 2011.
In other metals, nickel was $68 lower at $16,355. Stocks were up 1,854 tonnes at a new all-time peak of 401,850 tonnes and cancelled warrants rose 2,508 tonnes to 97,530 tonnes.
Zinc at $2,256 is flat while lead at $2,051 is $9 lower in price. Tin was last quoted at $20,220, $30 lower but no trades has been done yet.