LONDON: Copper prices eased on Monday as weak demand prospects in top consumer China were emphasised by slow economic growth, weak lending numbers and rising inventories.
Benchmark copper on the London Metal Exchange (LME) was down 0.3% at $9,847 a metric ton by 0940 GMT. Prices of the industrial metal have dropped more than 10% since hitting a record high above $11,100 on May 20.
China’s economy grew 4.7% in the second quarter, its slowest since the first quarter of 2023. That was below a 5.1% consensus forecast and the previous quarter’s 5.3% expansion.
Bank lending in China also rose below consensus in June, highlighting weak demand. Total social financing, watched by metals analysts as a key gauge of metals demand, slowed in the same period.
“Copper is soft again, under pressure from a round of weak Chinese data,” one metals trader said, adding that volumes were muted and that the firmer dollar was also a negative.
Demand comes under pressure from a stronger U.S. currency, which makes dollar-priced metals more expensive for holders of other currencies.
Copper slips as rising stocks highlight poor demand prospects
Stocks of copper in LME-approved warehouses have reached their highest since October 2021 at 210,325 tons, more than double levels in mid-May.
Most of the deliveries are to LME warehouses in South Korea and Taiwan, the closest delivery locations for exports from China, usually a net importer.
On the technical front, copper prices are hemmed in by support at $9750, the 100-day moving average, and resistance at the 200-day average of $9,980.
In other metals, aluminium fell to three-month lows at $2,464 a ton after data showed China’s production of primary aluminium in June rose to its highest in nearly a decade.
Aluminium was last down 0.4% at $2,470 a ton while zinc gained 0.5% to $2,957, lead slipped 0.9% to $2,189, tin was down 0.2% at $33,640 and nickel lost 0.4% to $16,780.
Comments