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Friday, 11 September 2015 16:58
LONDON: Copper fell on Friday due to persistent fears about a hard landing in top consumer China and dollar strength, though the metal was still set for its biggest weekly gain since May thanks to output cut announcements.
The possibility of US interest rates rising next week was also weighing on copper prices after its rally.
Copper hit a seven-week high this week mostly thanks to an announcement by commodities giant Glencore that it plans to cut 400,000 tonnes of output. US-listed Freeport became the first big miner to cut output last month. “The China worry is still there, it hasn’t gone away.
The Glencore (announcement) was positive but its not a game changer, its not enough to solve copper’s problem which is a combination of slowing demand growth and quite a lot of new supply coming on stream,” said BNP Paribas strategist Stephen Briggs.
Three-month copper on the London Metal Exchange fell 1.1 percent to $ 5,338 a tonne by 1032 GMT but was set to close the week up some 4 percent. The red metal has risen about 10 percent since hitting a six-year low of $ 4,855 on Aug. 24.
In a sign that worries about slowing growth in China are persisting, traders said premiums for term shipments of refined copper cathode to China were likely to drop further in 2016 after falling this year.
Making dollar-priced copper more costly for non-US investors, the dollar rose versus a currency basket ahead of Thursday’s eagerly anticipated rate decision from the US Federal Reserve.
The US labour market appeared to gain momentum in early September as fewer Americans filed for weekly unemployment benefits, but weak inflation pressures may complicate the Fed’s decision whether to increase rates.
Investors are also awaiting Chinese industrial output, retail sales and investment data on Sunday, which will give clues as to whether the world’s second-largest economy is continuing to lose momentum.
In a bid to boost flagging growth, China’s economic planner approved on Friday 143 billion yuan ($ 22.4 billion) worth of new railway projects that include a new high-speed railway line in central China.
