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Copper fell to a six-year low as commodities retreated and investors bought haven assets such as gold following the terror attacks in Paris. Signs of weak demand for metals in China, the world’s biggest consumer, also hurt prices.
The violence in the French capital renewed worries about political and economic risk, prompting investors to buy assets such as gold, U.S. Treasuries and European government bonds. Concerns metals demand is ebbing deepened as Codelco, the biggest copper producer, cut its surcharge for sales to China by 26 percent next year, according to two buyers. The reduction highlighted waning consumption in the Asian country.
“You have a confluence of economic and political influences at work,” Michael Turek, the head of base metals at BGC Partners Inc. in New York, said in an e-mail. “Obviously the tragic developments in Paris have caused a capital flight out of metal and into safety. Secondly, collapsing physical premiums for metal being imported into China really underscores how anemic demand is there.”
Copper futures for December delivery dropped 2.4 percent to settle at $2.1155 a pound at 1:20 p.m. on the Comex in New York, after falling to $2.1065, the lowest since May 2009.
China is facing an unprecedented drop in refined copper imports as a slowing economy erodes demand, according to one of the country’s largest buyers. Shipments to the country will shrink 10 percent next year, Stephen Huang, chief executive officer of trading house Arc Resources Co., said in an interview.
On the London Metal Exchange, copper, aluminum, zinc, nickel, lead and tin fell.