Copper and iron ore are feeling the weight of a slowdown in Chinese factory activity and weakness in the steel sector in April.
London Metal Exchange copper was down around 3.34% (1 May) at US$9,125 ($14,232) per tonne, while iron ore edged back 0.1% to US$99.76 per tonne overnight.
ANZ Head of Australian Economics Adam Boyton says despite the slowdown in Chinese manufacturing activity, data suggests the copper market remains tight.
“The Yangshan premium has nearly tripled to US$94/t over the past three months,” he notes.
“Inventories have fallen sharply in recent weeks, leading to a trading house warning that the market is suffering one of the greatest tightening shocks in history on fears of US tariffs.
“The Shanghai Futures Exchange reported copper inventories fell 24% yesterday to reach their lowest seasonal level since 2022.”
Iron ore, however, has notched its third consecutive monthly loss after Angang Steel, China’s second largest producer, posted its 11th consecutive quarterly loss.
“This comes amid reports that mills are about to cut steel output due to the uncertain economic backdrop,” Boyton says.
Gold was also on the backfoot after US data showed signs of economic contraction.
The price slid 0.4% to around $3,260 an ounce as of 10.30am AEST.
Boyton says the US economy contracted for the first time since 2022 on a pre-tariff import surge and more moderate consumer spending.
Meanwhile, the S&P/ASX200 has opened the session relatively flat and is down just 6.2 points to 8,120 points by 10.30am (AEST). Over the last five days, the index has gained 1.91%, but is virtually unchanged over the last year to date.
Sectors were mixed, with materials wiping off 0.92% while utilities advanced 0.24% and industrials rose 0.23%. Energy was little changed, inching down 0.02%.
With materials in the red, gold miner Regis Resources (ASX:RRL) dipped 3.33% to $4.36, lithium miner Liontown Resources (ASX:LTR) slipped 2.86% to $0.51 and Nickel Industries (ASX:NIC) retreated 2.66% to $0.55.
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation.
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: ASX & Stock
