Copper futures fell for the second time in three sessions on concern that an interest-rate cut announced by China won’t be enough to revive growth in the Asian nation, the world’s largest industrial-metals user.
The rate reduction, announced on Nov. 21, comes as China is set to report the slowest full-year expansion since 1990 amid weakness in the property market and manufacturing. The cut is “to be seen more as an effort to prevent further cooling of the Chinese economy” than to boost growth, Commerzbank AG said in a note to clients. Copper has lost 12 percent this year, partly on concern that demand in China would ebb.
“Positive as the price reaction was to the Chinese rate cut on Friday, we think it will do little to jump start the economy, as more deep-seated structural issues still have to be worked through such as high debt levels and a sagging real estate market,” Edward Meir, an analyst at INTL FCStone Inc. in New York, said in a report.
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