Miners and Metals Drop on Rising Supply Concern and China Demandby
Vedanta and Glencore lead mining stocks lower in London
Copper will continue to weaken this quarter, Barclays says
Mining stocks and most base metals fell as concerns of rising supply and weak Chinese demand returned following a rebound in prices at the start of the year.
The Bloomberg World Mining Index dropped 1 percent, with Glencore Plc and Vedanta Ltd. leading losses of more than 5 percent. Miners and copper executives gathering at the annual CESCO meeting in Chile don’t appear to be concentrating on output reductions amid a global price slump, said Michael Turek, the head of base metals at BGC Partners Inc. in New York.
“The CESCO dialog seems to focus more on cutting costs than cutting production,” Turek said in a telephone interview. “Recovery rallies look to be capped.”
Aluminum, zinc, lead and tin declined by more than 0.9 percent on the London Metal Exchange. Copper rose 0.3 percent to settle at $4,775 a metric ton ($2.17 a pound) at 5:50 p.m. in London after falling for seven straight days, the longest stretch since February 2014.
A recovery in mining stocks and base metal prices at the start of the year has reversed in recent weeks as banks such as Barclays Plc have cautioned that the rally was unsupported.
Economic growth in China, the largest consumer of copper, increased last year at the slowest pace in a generation. The metal will continue to weaken this quarter as a seasonal uptick in Chinese economic activity isn’t enough to offset strong inventory levels and a worrisome medium-term outlook, Barclays said in a report Monday.
- Copper futures for May delivery fell 0.1 percent to $2.138 a pound on the Comex in New York.