Prices tumble on weak China factory data, supply glut
LONDON - Commodities prices slumped again on Monday with some hitting multi-year lows on worries about a glut of supply facing weak demand in China, after factory activity in the world's top consumer of raw materials shrank more than expected las...
LONDON - Commodities prices slumped again on Monday with some hitting multi-year lows on worries about a glut of supply facing weak demand in China, after factory activity in the world's top consumer of raw materials shrank more than expected last month.
Copper and sugar sunk to their weakest levels in more than six years while Brent crude oil tripped to six-month lows just above $50 a barrel.
The 19-commodity Thomson Reuters/Core Commodity CRB Index , which has shed 31 percent over the past 12 months, hit the lowest level in more than six years on Friday.
Speculators unleashed more selling on commodity markets on Monday after data showed conditions for Chinese manufacturers deteriorated to their weakest in two years.
"The really poor Chinese manufacturing data would be the primary concern for metals," said Sergey Raevskiy, metals research analyst at SP Angel.
Benchmark copper on the London Metal Exchange dropped 1.7 percent to $5,142 a tonne, its lowest since July 2009 before paring losses.
China accounts for nearly half of global consumption of the metal used in power and construction.
On the energy markets, Brent crude oil touched a low of $50.85 a barrel, its weakest since Jan. 30, after fresh evidence of growing oversupply and data highlighting slowing demand in China.
A Reuters survey last week showed oil output by the Organization of the Petroleum Exporting Countries (OPEC) reached the highest monthly level in recent history in July.
"The market seems to again focus on the supply situation ... one of the difficulties is that Iran may be coming back and there is no obvious sign that OPEC will make room for them," Ric Spooner, chief market analyst at CMC Markets in Sydney said.
Brent crude has lost nearly 20 percent so far in the third quarter, which would make this the biggest slide for the three months from July to September since 2008.
Raw sugar hit a fresh 6-1/2-year low, pressured by a weaker Brazilian real currency and hefty stocks in India and Thailand.
Benchmark raw sugar futures hit a 6-1/2-year trough of 11.05 cents a lb in early trading.
"There is plenty of sugar around, and probably we will reach new lows if the real weakens further," said Claudiu Covrig, senior agricultural analyst with data provider Platts.
Gold was relatively calm, as the dollar steadied ahead of U.S. economic indicators that could bolster expectations for a rise in U.S. interest rates soon.
Spot gold, which fell by the most in two years in July, dipped 0.3 percent to $1,093 an ounce.