Industrial Metals Reacted to UK Voting Results

The decision to withdraw Britain from the European Union will have an impact on the entire world economy. On Friday, all industrial metals were plunged by more than 3 percent. Copper prices fell 4 percent on the London Metal Exchange. This is a reaction to information on the results of the vote in the UK on Thursday. Supporters of the withdrawal from the European Union of Great Britain have a lead of more than 1 million votes.

“This will certainly lead to even more uncertainty in the markets, including metals and other financial assets that are very sensitive to macroeconomic changes,” said Xu Liping, Principal Analyst at HNA Topwin Futures Ltd. “It could also affect the Chinese economy, the largest consumer of metals in the world,” he added. A significant decline in the price of copper leads to a drop in mining stocks - Glencore lost 14 percent and BHP Billiton Ltd. fell 9.2 percent.

According to the findings of Eurofer, the UK's exit from the EU could further complicate the situation in the steel industry. Eurofer recently recalled that the UK steel industry is part of the entire steel sector in the European Union and Brexit could damage value chains. According to Eurofer, last year in the UK, 71 percent of the total exports of flat products and 65 percent of the exports of long products were sold to the EU market.

“Given the access to the European single market and the perceived benefits that would be lost in a Brexit event, the potential costs are very real. Alternatives such as trade under WTO rules or negotiations on a free trade agreement with the EU will be unattractive or uncertain, ”said Axel Eggert, CEO of Eurofer.