Iron ore futures rebound but copper slides to new 16-month low (NYSE:FCX)

Iron ore futures rebound but copper slides to new 16-month low (NYSE:FCX)

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Shares of industrial miners are on watch as iron ore rallied on Thursday from its lowest close in more than six months after China President Xi Jinping pledged to achieve economic goals for the year, although copper continues to decline.

Freeport McMoRan (NYSE:FCX) shares have plummeted 28% since June 7; other related stocks include (HBM), (TECK), (SCCO), (AA), (CENX), (KALU), (NYSE:RIO), (NYSE:BHP), (VALE), (X), (CLF), (NUE), (MT), (STLD), (OTCQX:AAUKF), (OTCQX:NGLOY), (OTCPK:GLCNF), (OTCPK:GLNCY)

According to Reuters, the most-traded iron ore on China’s Dalian Commodity Exchange (SCO:COM) ended daytime trading +2.5% at 749.50 yuan/metric ton ($111.77), rebounding from a 16-month low on Wednesday, and the front-month contract on the Singapore exchange recently was +5.6% at $114.20/ton.

Despite Thursday’s gains, iron ore and other steelmaking ingredients are on track for weekly losses, as China’s weakening economy has seen reduced demand for steel, which has led to a buildup in steel inventories and a slowdown in production.

But benchmark copper (HG1:COM) tumbled to a 16-month low on the London Metal Exchange was -1.9% at $8,603/ton after touching $8,564.50; prices are down more than 20% from a record high of $10,845 in March.

“We are seeing a broad-based cyclical selloff” in copper and industrial metals, WisdomTree analyst Nitesh Shah told Reuters, adding that aggressive interest rate hikes could push copper even lower.

But Shah also said he expects copper prices will rise significantly within five years due to rising demand for the metal as the world transitions from fossil fuels to electrification.

Chile’s finance minister said state-owned Codelco, the world’s largest copper producer, is continuing operations despite a national strike by workers that started Wednesday.

Most other LME metals also showed modest losses, while aluminum was roughly flat after its recent plunge to six-month lows.

Originally Posted on: https://seekingalpha.com/news/3851147-iron-ore-futures-rebound-but-copper-slides-to-new-16-month-low?source=feed_tag_commodities
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