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People's Daily Online>>China Business

Europe’s debt, China’s GDP send commodities tumbling

By Michael Bellart (Global Times)

08:27, April 17, 2012

Chinese commodity futures took a beating Monday with Friday's sell-off extending into Monday as investors fled from riskier assets on concerns about flagging global economic growth.

The most traded copper contract on the Shanghai Futures Exchange (SHFE), for July delivery, plunged 2.26 percent to close at 56,720 yuan ($8,982.49) per ton. The contract fell 2.12 percent at opening, following a 1.9 percent drop in the corresponding contract on the London Metal Exchange (LME) overnight.

The benchmark three-month LME copper contract was trading at $7,892 per ton when the Chinese mainland markets closed Monday, down 1.45 percent for the session.

Copper and other commodities continued to fall on disappointing news about China's economy from last week as well as reignited concerns about European sovereign debt, said Fang Junfeng, a copper analyst for Shanghai Cifco Futures.

The National Bureau of Statistics reported Friday that China's GDP grew at 8.1 percent year-on-year in the first quarter of 2012 - well below market expectations.

Meanwhile, the market's attention has again refocused on the eurozone, Spain in particular. The yield on Spain's 10-year government bonds again rose by more than 10 basis points Monday before the mainland markets closed, breaching the 6 percent mark.

"With the rising yield of the Spanish 10-year bond, the market has again started to worry about Europe's debt problem," Fang told the Global Times.

This concern curbed the market's appetite for commodities, analysts said.

All major Chinese commodity futures fell Monday. The most active SHFE steel rebar contract, for October delivery, weakened by 1.1 percent. SHFE gold for December delivery lost 2 percent. Soybean meal and soybean oil futures on the Dalian Commodity Exchange each fell by more than 1 percent.

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