Metals Downturn Continues

Metals extended their biggest daily plunge this year, buffeted by signs of ample supplies of copper, concern over the outlook for demand in China and a stronger dollar. Iron ore futures plunged in Dalian, steel tumbled in Shanghai and mining shares slid to the lowest level in four months.

Three-month copper lost 0.7 percent to $5,560 a metric ton on the London Metal Exchange by 2:47 p.m. in Singapore, after sinking 3.5 percent on Wednesday as stockpiles tracked by the LME jumped by the most in almost two months. Nickel fell 2 percent, adding to a 3 percent slide a day earlier. Iron ore and steel futures in China slumped the maximum daily limit.

Metals have come under pressure after data this week signaled a slowdown in China’s manufacturing sector, with the LMEX Index tumbling 2.5 percent on Wednesday, the most since November. The sell-off was also spurred after lawmakers in the Philippines rejected the appointment as Environment Secretary of Gina Lopez, who driven a mining crackdown. U.S. central bankers kept to their outlook for gradual monetary-policy tightening.

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.