LONDON: Copper prices hit one-week lows on Wednesday, pressured by worries over demand in top consumer China, loans data and a firmer dollar, though labour negotiations at the giant Escondida mine in Chile provided some support.
Benchmark copper on the London Metal Exchange traded 0.2 percent down at $7,211 a tonne in official rings from an earlier $7,169, its highest since June 6.
“Credit indicators out of China were quite weak, fabrication numbers for copper are poor,” said Dan Smith, head of commodities research at Oxford Economics. “But supply risks are still significant, we’re watching Escondida pretty closely.”
LOANS: Chinese banks extended 1.15 trillion yuan ($179.6 billion) in net new yuan loans in May, below analysts’ expectations of 1.2 trillion yuan but up slightly from April’s 1.18 trillion yuan.
FINANCING: China’s total social financing, a broad measure of credit and liquidity, dropped sharply to 760.8 billion yuan in May from 1.56 trillion yuan in April, central bank data showed on Tuesday.
DOLLAR: A firmer US currency makes dollar-denominated commodities more expensive for non-US firms, which could subdue demand.
INTEREST RATES: The US Federal Reserve is widely expected to raise rates on Wednesday and investors will scan its announcement for clues on how many more rises might be on the cards this year.
ESCONDIDA: Global miner BHP said it had responded to the latest contract proposal from unionised workers at its Escondida mine, the world’s largest, triggering a new round of talks that could last a month or more.
The union’s proposal, filed with the company in early June, included a salary increase of 5 percent and a one-off bonus of $34,000, equivalent to 4 percent of dividends distributed to shareholders.
PRICES: Aluminium traded 1.1 percent down at $2,276, zinc ceded 0.1 percent to $3,195, lead fell 0.2 percent to $2,470.5, tin was bid 1.2 percent lower at $20,875 and nickel was bid up 0.2 percent to $15,235.