Shanghai - Copper traded near the lowest in a month after Chinese industrial companies reported the biggest decline in profit since at least October 2011.
Industrial profits tumbled 8.8% from a year earlier, with the largest drops in producers of coal, oil and metals, the National Bureau of Statistics said on Monday.
China’s stock-market plunge and currency devaluation are adding new challenges as the country struggles with excess capacity, sluggish investment and weaker manufacturing.
Glencore sank to another record low as Investec warned that there was little value for shareholders should low commodity prices persist.
“While some investors anticipate a demand recovery, there are still uncertainties,” Wei Lai, an analyst at Shanghai Cifco Futures, said by phone. “Next month is critical for copper’s performance over the rest of the year.”
Copper for delivery in three months was little changed at $5 024 a metric ton as of 10:59 in London. The metal sank 4.4% last week, the biggest retreat since January. For the quarter, copper has dropped 13%, the most since 2011.
Glencore slump
Glencore, the miner and commodity trader run by billionaire Ivan Glasenberg, fell as much as 17% to 80.26 pence, the lowest since the company’s $10bn initial public offering in 2011. The stock declined 23% last week.
“The challenging environment for mining companies leads us to the question of how much value will be left for equity holders if commodity prices do not improve,” Investec said in a note to investors on Monday.
The bank said that if major commodity prices remain at current levels, almost all Glencore’s equity value would evaporate in the absence of substantial restructuring.
Shares of Anglo American [JSE:AGL], Vedanta Resources and BHP Billiton [JSE:BIL] at least 3% on Monday. Copper futures for delivery in December slipped 0.4% to $2.2750 a pound on the Comex in New York.