Industrial metal prices jump as Evergrande fears ease
09:18, 22 September 2021
Industrial metals on the London Metal Exchange (LME) added big gains on Wednesday on the news that struggling Chinese property firm Evergrande will be able to pay interest on a domestic bond debt, thereby fending off fears of the company’s collapse and the feared subsequent aftershocks throughout global markets.
On the LME, major metal stock prices were all up, by the following percents / amounts: copper rose by 3.28% to $9,270 a tonne; tin rose by 3.49% to $35,185 a tonne; aluminium increased by 1.95 % to $2,901 a tonne; and zinc and nickel climbed 1.2 % and 1.06 % respectively to $3,032 a tonne and $19,055.
Debt crisis impacts
Effects of the Evergrande debt crisis, which has recently spooked the global markets, have also “highlighted the downside risks for metals demand from the property sector in the longer term”, ING’s head of commodity strategy, Warren Patterson, warned yesterday.
Patterson added that the latest shock comes on top of the bearishness on steel and raw material demand following the Chinese government’s efforts to limit crude-steel production in an effort to tackle carbon emissions and pollution.
Copper rebound considerations
On copper, Steen Jakobsen, chief investment officer at Saxo Bank, points out that the rebounding metal managed to hold an important price mark throughout the two-day crisis.
Said Jakobsen: “Copper has, despite the recent unease about Chinese property sector demand, managed to hold above key technical support in the $4 per pound area.
“While the outlook for green transformation demand remains strong, the metal needs to establish a higher high above $4.47 before potentially attracting fresh momentum buying.”
Read more: Base metals rebound amid Evergrande debt spillover fears