Chinese inflation fret exacerbates fall in base metal prices, LME copper down 0.7%

LONDON (Scrap Monster) : The base metal prices fell apart on the London Metal Exchange (LME) following the sharp decline in Chinese Producer Price Index (PPI) for the month of April.

At the PM kerb close on Thursday, LME three-month copper was down 0.7 per cent at $US7,354 a metric ton. Lead, Zinc, Aluminum, Nickel and Tin followed suit. Aluminum Alloy prices held up.

The Chinese National Bureau of Statistics Thursday came out with the country’s April PPI data which recorded a fall of 2.6% year-on-year. The weak PPI data suggested that the market demand continues to remain sluggish. The PPI is regarded as a gauge of consumer inflation. The drop was below all estimates and was more than adequate to thrash the market sentiments.

The sharp dip in US jobless claims came to the rescue of the plunging base metal prices, but could not withstand the sell off triggered by fears of weaker Chinese demand for industrial metals. China is the world’s top consumer of copper, accounting for nearly 40% of the global production.

The market is now in anticipation of the Chinese industrial production data due to be released early next week, which will paint a clearer picture.

Here’s a wrap up of the price movement of base metals on LME, as on Thursday (9^th May, 2013)

3 Months Metal Bid-Ask Change from Wednesday PM kerb

Copper          7354.0-7355.0                      Down   54

Lead             2015.0-2015.5                      Down   49

Zinc              1872.0-1873.0                       Down   22

Aluminum      1890.0-1891.0                       Down   18

Nickel            15280.0-15290.0                   Down   120

Tin                20700.0-20725.0                    Down   45

Aluminum Alloy 1790.0-1800.0                     Unchanged

Aluminum Alloy-NASAAC 1830.0-1850.0         Up   5

Note:  The above prices are in dollar per metric ton.