Copper falls further despite China reporting steady GDP growth

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Wednesday, October 19, 2016

The price of copper dropped for the fifth straight trading day on Wednesday in London, as China takes steps to cool down its housing market and despite the country's GDP expanding 6.7% year-on-year in the third quarter.

Spot copper closed down 0.49% to US$4,642.50/t (US$2.106/lb) on the London Metal Exchange from Tuesday's US$4,665.50/t, according to Chile's state copper commission Cochilco.

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China's GDP growth figure was what analysts had expected and matches that reported for Q2.

"The stabilization of the Chinese economy is due primarily to stronger domestic demand, especially in the real estate sector and also in the automotive industry," said a note from Commerzbank.

"However, because there are signs of overheating on the housing market, the Chinese government has taken steps to cool the market down," it said, adding that "these are likely to have a negative impact on China's economy in the next quarters."

Aluminum closed 2.5% lower on Wednesday to US$1,622/t, while lead was down 1.5% to US$1,965/t and nickel fell 0.5% to US$10,280/t. Zinc was 1.1% lower at US$2,270/t, tin was up 0.7% at US$20,000/t, and molybdenum held steady at US$15,250/t.