Copper set for worst week since 2022 as China plenum disappoints

Copper set for worst week since 2022 as China plenum disappoints

Copper headed for its worst weekly loss in almost two years and iron ore extended a slump toward $100 a ton as a policy meeting in China failed to lay out more stimulus to shore up metals demand.

Futures for the red metal have fallen by almost 5% in London this week amid a broad retreat that’s also battered aluminum, tin and nickel. The complex was also dragged lower on Friday by a shift away from risk assets and a stronger US dollar. In Singapore, iron ore futures dropped below $104 a ton.

Copper — used in pipes, wiring and batteries — has retreated from a record hit in May on concerns about the strength of demand in China, where growth was the slowest in five quarters in the three months to June. The outcome of the Third Plenum, a key conclave of Communist Party officials in Beijing this week, has so far showed few signs of major steps to boost demand or arrest a long-running property slump.

“A lack of major policy shift in China weighed on sentiment,” ANZ Group Holdings Ltd. analysts including Daniel Hynes said in a note. “That left investors disappointed that there wasn’t greater focus on tackling structural issues in the economy, such as the beleaguered property sector.”

In sign of weakening demand, global copper inventories have ballooned in recent months. Stockpiles held in warehouses tracked by the London Metal Exchange have more than doubled since mid-May to hit the highest since September 2021, with most of the build-up seen in Asian sheds.

Copper was steady at $9,400 a ton on the LME at 11:07 a.m. in Shanghai after posting losses in the first four days on the week. Aluminum has slumped about 4% this week, while tin has retreated by more than 6%.

Iron ore dropped 1.6% to $103.80 a ton in Singapore, down by almost 4% this week. In addition to the China demand outlook, losses have also been driven by reports of higher production from the world’s top miners.