(Bloomberg) -- Copper dropped as base metals extended the worst weekly slump in almost two years, with a modest rate cut in China doing little to offset worries about demand in the world’s top commodities consumer.
Prices for the metal viewed as an economic bellwether fell for a sixth day, even after China increased support for the economy with surprise interest-rate cuts. The move came after a lack of short-term stimulus from a major Communist Party meeting disappointed investors last week.
A detailed document published Sunday laid out the party’s plans to bolster the finances of China’s local governments, including by shifting more revenue from central coffers. That could incentivize officials to lift spending, although any effect on consumption will likely take time.
The LMEX Index, which tracks six base metals, plunged 5.6 per cent in London last week. Copper extended its retreated from a record high in May amid alarm over weak Chinese demand and rising global inventories.
There were fresh signs of demand weakness in China as refined copper exports more than doubled in June, blowing past a previous record set in 2012. The rare surge in exports has helped drive global inventories higher, with stockpiles at London Metal Exchange global warehouses more than doubling over the past two months to the highest since September 2021.
Copper fell 0.5 per cent to US$9,260 a ton as of 11:46 a.m. London time on the LME, after earlier hitting a low of $9,233.50. All metals declined on the exchange.
©2024 Bloomberg L.P.