London - Copper fell to a six-year low as investors added to bearish positions amid expectations for a global supply glut and slowing demand in China, the world’s biggest consumer.
Short positions in the metal increased 39 percent, the most since January 2014, according to US Commodity Futures Trading Commission data released on Monday. A rally for Chinese stocks fizzled on Tuesday after technology and small-company shares plunged, as the Asian nation heads for the slowest economic growth in 25 years. The metal has lost 25 percent this year.
“The copper market has been one of the worst markets I’ve ever seen, copper demand is basically non-existent right now, and all this started when there was a downturn in the Chinese stock market this summer,” Phil Streible, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. “Copper prices are going to continue to travel down to historical levels.”
Copper futures for December delivery fell 0.7 percent to settle at $2.1115 a pound at 1.16pm on the Comex in New York, after touching $2.075 a pound, the lowest since May 2009.
Chile’s Codelco, the biggest copper producer, plans to cut the premium that purchasers must pay on sales to China by the most since 2009 to try to boost shipments to the largest consumer and counter slowing demand, according to two buyers. The copper market in 2015 will have a production surplus of 78 000 metric tons, even as mining companies cut output, according to CRU consultant Matthew Wonnacott.