Copper and iron ore prices are under pressure due to a slowdown in Chinese factory activity and weakness in the steel sector during April. London Metal Exchange copper prices decreased by approximately 3.34% on May 1, trading at US$9,125 per tonne, while iron ore prices slightly decreased by 0.1% to US$99.76 per tonne overnight. Despite the manufacturing slowdown, ANZ Head of Australian Economics Adam Boyton indicates the copper market remains tight, noting that the Yangshan premium nearly tripled to US$94 per tonne over the past three months. Shanghai Futures Exchange reported copper inventories fell 24% yesterday to reach their lowest seasonal level since 2022.
Iron ore, however, has experienced its third consecutive monthly loss. Angang Steel, China’s second-largest producer, reported its 11th consecutive quarterly loss, contributing to the downward pressure. Boyton notes that mills are reportedly planning to cut steel output due to an uncertain economic backdrop. Gold prices also declined, sliding 0.4% to around $3,260 an ounce, influenced by recent US data indicating economic contraction. The S&P/ASX200 opened relatively flat, decreasing just 6.2 points to 8,120 points by 10.30 am AEST. Materials sector stocks experienced declines, with Regis Resources, Liontown Resources, and Nickel Industries all retreating.