LONDON: Copper prices fell on Friday after weak manufacturing data in top metals consumer China, but losses were contained by the possibility of further economic stimulus.
Three-month copper on the London Metal Exchange shed 0.2% to $10,112 a metric ton by 1000 GMT, having slipped 9% since touching a record high of $11,104.50 on May 20.
China’s manufacturing activity fell unexpectedly in May as a protracted property crisis in the world’s second-largest economy continued to weigh on business, consumer and investor confidence.
“The Chinese numbers, being so soft and coming in below 50, might be something that make people reassess their demand forecasts from China,” said WisdomTree commodity strategist Nitesh Shah.
The official manufacturing purchasing managers’ index (PMI) dropped to 49.5 in May from 50.4 in April, below the 50 mark that separates growth from contraction.
Copper stumbles as funds liquidate amid rate worries
“Maybe these softer numbers will also be a catalyst for more urgent action from policymakers in China,” Shah added.
The most traded July copper contract on the Shanghai Futures Exchange fell 1.6% to 82,500 yuan ($11,388.89) a ton.
Despite recent losses, LME copper has gained about 2% this month and 19% this year.
Copper’s rally was fuelled by speculators and a short squeeze on the U.S. Comex exchange that send prices to a premium of about $1,000 over LME levels.
Comex prices have declined more than LME prices in recent days, narrowing the gap to about $180 a ton. June copper futures were down 0.9% at $4.63 a lb.
In other metals, LME aluminium was unchanged at $2,703.50 a ton, nickel added 0.3% to $20,125, lead gained 0.5% to $2,287.50 and tin was up 0.6% at $33,300 while zinc slid 1.9% to $3,013.50.
Comments
Comments are closed.