Last night the Greek share market reopened for the first time in five weeks and finished 16% lower after having sunk as much as 23% earlier in the day, with banks losing as much as 30%. While not directly related to commodity markets, it’s fair to say the markets are now waiting to see what collateral damage rises from the rubble, and how this may affect the already delicate situation in Greece.
Yesterday, the released China PMI indicated activity in China falling to a 2 year low, amidst a trend of weak demand, a battered property sector and another wounded share market. Copper reached a new 6 year low and Aluminum is now trading at its lowest level since July 2009, as are many of our major LME indicators (graphs attached for your perusal).
The S&P GSCI Total Return Index, which tracks a basket of 24 commodities, notched its worst monthly loss since November 2008
The Australian Dollar currently trades at 72.77. At 2.30pm today the RBA is due to announce its latest level for official interest rates, with only 3 out of 28 economists predicting a drop.
Please find the following for your perusal;
**** DJ Copper Closes at Six-Year Low on Worry Over China Demand ****
By Ira Iosebashvili and Ese Erheriene
Copper prices closed at a six-year low Monday, as concerns over demand for the industrial metal grew amid new data showing weakness in China’s economy.
The Caixin China manufacturing purchasing managers index, a measure of factory activity across the country, fell to a two-year low in July, research firm Markit said Monday. China’s official PMI, released Saturday, also reflected a trend of weak demand amid a battered property sector and swooning stock market. China is the world’s largest copper consumer, accounting for some 40% of global demand.
“Clearly, it’s disappointing, especially in light [of the fact] that the Chinese central bank has already implemented many fiscal measures to counter the slowdown, obviously without having much success so far,” said Daniel Briesemann, a metals analyst at Commerzbank.
Weak demand in China, ample supply of raw materials and a stronger dollar sent commodity prices tumbling in July. The S&P GSCI Total Return Index, which tracks a basket of 24 commodities, notched its worst monthly loss since November 2008. Copper is priced in dollars, and becomes more expensive to foreign buyers when the buck appreciates.
Other industrial metals fell in copper’s wake. On the London Metal Exchange, aluminum for delivery in three months was down 0.4% to $1,612 a metric ton, the lowest since July 2009. Nickel was down 2.7% to $10,745 a metric ton.