Base metals drop as caution over demand outlook persists
Sept 6 (Reuters) -Most nonferrous metals dropped on Friday, weighed down by caution surrounding the upcoming U.S. elections and potential economic policies that could impact demand for commodities.
Three-month copper on the London Metal Exchange (LME) CMCU3 was down 0.1% at $9,081 per metric ton, as of 0138 GMT, and the most-traded October copper contract on the Shanghai Futures Exchange (SHFE) SCFcv1 increased 0.7% to 72,420 yuan ($10,218.13) a ton.
LME copper is poised for a second straight weekly fall, down 1.5% so far, and SHFE copper is also on track for a weekly decline.
Analysts at Citi forecast prices of copper in the next three months at $9,500 a ton, aluminium at $2,500 and zinc at $2,800, adding that the threat of higher or new trade tariffs from a potential Donald Trump presidency could deter a demand rebound.
"We reiterate our cautious outlook for the base metals complex until after the U.S. election when we expect more clarity on U.S. and China policies and manufacturing sentiment as Fed rate cuts progress," the analysts said in a note.
It will take some time for investors to gauge data that can convince them to meaningfully rebuild positions in metals as a global growth rebound proxy, they said.
Still, continued tightness in the copper concentrate market provided some support to metal prices. The shortage of mined copper will continue into 2025, Chile's state-run copper commission Cochilco said in a study.
LME nickel CMNI3 fell 0.4% to $16,010 a ton, zinc CMZN3 declined 0.7% to $2,781, lead CMPB3 eased 0.4% to $1,988 and tin CMSN3 declined 0.6% to $30,595, while aluminium CMAL3 was flat at $2,378.50.
SHFE aluminium SAFcv1 fell 0.5% to 19,250 yuan a ton, nickel SNIcv1 declined 1% to 123,750 yuan, zinc SZNcv1 dropped 2.4% to 22,615 yuan, lead SPBcv1 lost 1.5% to 16,835 yuan, and tin SSNcv1 was nearly flat at 248,920 yuan.
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Reporting by Mai Nguyen in Hanoi; Editing by Sherry Jacob-Phillips
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