14.7 C
New York
Monday, September 25, 2023

Copper heads for second monthly drop on dismal China data

LONDON: Copper prices fell back towards six-month lows on Wednesday after data showed factory activity in top consumer China shrank faster than expected in May.

The figures provided more evidence that China’s economic rebound – already focused on services more than metals-intensive manufacturing or construction – is losing steam.

Underlining the weak metals demand, official data showed factory output in Japan and South Korea declined in April.

Copper prices rise on softer dollar and easing US debt worries

The mood in wider markets was bearish. Asian and European stock markets fell, while investors braced for a crucial vote in Washington on the U.S. debt ceiling.

China’s yuan fell to its lowest against the dollar since November, pressuring dollar-priced metals by making them costlier for Chinese buyers.

Benchmark copper on the London Metal Exchange (LME) was down 0.7% at $8,066.50 a tonne at 1016 GMT and near last Wednesday’s low of $7,867.

Prices of the metal used in power and construction are down around 6% this month after losing 4.4% in April.

“China isn’t rebounding anywhere near as fast as people hoped at the beginning of the year,” said WisdomTree analyst Nitesh Shah.

As long as weak Chinese data keeps coming in, prices will remain subdued, he said, adding, “there’s probably a few months of that weakness ahead of us.”

There are, however, some signs of life. Chinese Yangshan copper import premiums rose to $42.50 a tonne from around $25 a month ago, with analysts at J.P.Morgan saying lower prices were incentivising Chinese physical metal purchases.

While copper inventories in LME-warehouses almost doubled to 100,000 tonnes in the last six weeks, around 10,000 tonnes was earmarked for delivery in recent days.

Benchmark zinc was down 2% at $2,256 a tonne after LME zinc inventories nearly doubled to 87,500 tonnes since May 23, suggesting a surplus.

LME aluminium was roughly unchanged at $2,223.50 a tonne, nickel fell 1.9% to $20,620, lead slipped 1.4% to $2,036 and tin was flat at $25,560.

Copper heads for second monthly drop on dismal China data

Source: Brecorder

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -

Latest Articles

Popular Articles