Commodities fall on worries about China

More signs of slower economic growth in China are creating worries that the world’s second-largest economy may curb its huge appetite for commodities. HSBC Corp. said yesterday that a preliminary survey of purchasing managers showed China’s manufacturing sector continued to slow in September but the pace of the slowdown appeared to be stabilising. Separately, financial data company Markit said its purchasing managers’ index for the 17 countries that use the euro currency declined more than expected in September.  That indicates Europe appears headed for a deepening recession. Europe is China’s biggest export market. China is a huge importer of raw materials such as copper, oil and coal for use in its manufacturing sector. 

 

 

 

It also has been importing huge quantities of US soybeans to help feed its population. If China’s economy continues to slow, traders are worried that demand will drop, analysts said. Copper for December delivery fell 5.5 cents to finish at US$3.759 per pound, October platinum dropped US$16.50 to US$1,623.90 per ounce and December palladium decreased US$11.95 to US$661.10 per ounce. December gold fell US$1.50 to end at US$1,770.20 per ounce and silver rose 9.4 cents to US$34.682 per ounce. November soybeans fell 50.75 cents, or 3 per cent, to end at US$16.1875 per bushel, its second hefty decline this week. 

 

 

 

The price dropped 70 cents Wednesday after early reports of crop yields from some states showed a better-than-expected harvest. Mike Zuzolo, president of Global Commodity Analytics & Consulting LLC, said Thursday’s decline occurred because of expectations that soybean demand is going to be “harder and harder to come by as China slows down more and more.” December wheat fell 2 cents to finish at US$8.795 per bushel and December corn fell 10.5 cents to US$7.46 per bushel. In energy trading, benchmark oil fell 11 cents to end at US$91.87 per barrel, heating oil rose 5.35 cents to US$3.0975 per gallon, gasoline increased 7.54 cents to US$2.904 per gallon and natural gas ended up 3.5 cents at US$2.797 per 1,000 cubic feet.