Wednesday, 15 July 2015 21:53
LONDON: Copper slipped on Wednesday on a firm dollar and a renewed slide in top consumer China’s equity markets, though data showing strong factory output and second-quarter growth in China limited losses.
Investors were also nervous ahead of a Greek parliamentary vote on austerity measures.
Three-month copper on the London Metal Exchange ended down 0.6 percent at $ 5,531 a tonne, having traded in positive territory for most of the day. Last week, prices hit their weakest in six years at $ 5,240.
Zinc ended up 1 percent at $ 2,075 a tonne, having earlier hit its highest since mid-June at $ 2,117.50. Lead closed up 1.8 percent at $ 1,873 a tonne, having hit its highest since mid-June at $ 1,881.
China’s economy grew at a slightly better-than-expected annual rate of 7.0 percent in the second quarter, though further stimulus is still expected given the recent stock market falls.
China’s industrial output growth quickened in June to 6.8 percent, while the floor area of property sold rose 3.9 percent in the first half.
“This (China data) doesn’t change the underlying theme for metals, namely, demand is weakening and there’s still too much supply,” INTL FCStone analyst Ed Meir said.
The dollar rallied after Federal Reserve Chair Janet Yellen said the U.S. central bank remained on track to raise interest rates this year. A strong dollar makes dollar-priced metals costlier for non-U.S. investors.
“Over the next few days prices will be choppy, frankly. At the end of the day Greece has debts it will never be able to repay and the stock market in China is down again,” BNP Paribas strategist Stephen Briggs said.
Chinese shares tumbled on Wednesday despite the surprisingly positive economic data.
“Copper is not ready for takeoff to the upside yet. My top pick remains zinc. I think it has upside sooner than copper and this is something the market believes as well,” Briggs said.
The global zinc market moved to a deficit of 34,500 tonnes in May from a revised surplus of 20,100 tonnes in April, industry data showed.
The data also showed the global lead market saw a deficit of 5,000 tonnes in May after a revised deficit of 12,100 tonnes in April.
Nickel ended down 1.1 percent at $ 11,495 a tonne. Wild swings continue in the metal, as some investors bet supply will tighten, while others see ample stockpiles in China.
Tin ended down 0.5 percent at $ 14,670 a tonne, while aluminium ended up 0.6 percent at $ 1,718.
