All futures products traded on Shanghai Futures Exchange (SHFE), including copper, aluminum, zinc, natural rubber and fuel oil, fell yesterday because of investors' rising concern about a slowdown in the US economy and its implications for the global economy.
"No bullish news has been heard recently about the supply and demand fundamentals (of commodities) in the global market," said Lin Hui, an analyst at a futures company of Orient Securities. "Under such circumstances, uncertainties about the world economic growth will have a negative impact on commodity prices."
Natural rubber led yesterday's price drop in Shanghai, following the weak performance on Tokyo Commodity Exchange (TOCOM), the international pricing center for natural rubber.
The most actively traded natural rubber contract for April delivery fell 2.63 percent to 296.6 yen per kg. On the SHFE, the most actively traded natural rubber contract for January delivery slumped 4 percent to 21,710 yuan per ton, the biggest one-day drop since trading started in late 1997.
Analysts said the recent drop of US dollar against the yen has dragged down the prices of commodities on TOCOM. The dollar yesterday fell another 3.07 percent to 110.36 against the yen, triggering, among other things, the price slump of natural rubber on TOCOM, which, in turn, pushed down prices in other markets.
Non-ferrous metals, including copper, aluminum and zinc, yesterday saw big price drops on SHFE, in sync with the downtrend in the global market.
In Shanghai, copper futures for December delivery dropped 3.46 percent to 59,990 yuan per ton while zinc futures for delivery in January fell 3.71 percent to 21,805 yuan per ton.
Three-month copper futures on London Metals Exchange (LME) dropped 1.85 percent last Friday, making the global benchmark copper price fall an aggregate 4.8 percent in the past week. Copper futures on LME in yesterday's electronic trading dropped 1.63 percent to $6,925, standing below the $7,000 psychological barrier.
Stephen Green, senior economist at Standard Chartered Shanghai, said the copper market was hit hard by the weakness in the US housing market and the rising LME stocks, which reached a six-month high this month.
(China Daily November 13, 2007)
