The most-traded May copper contract on the Shanghai Futures Exchange slipped 1 percent to 42,080 yuan ($6,721) a tonne on Wednesday as a dollar rally paused and traders eyed supply concerns despite only small signs of improvement in Chinese demand, which was further clouded by the latest China data.
Growth in China's investment, retail sales and factory output all missed forecasts in January and February and fell to multi-year lows, leaving investors with little doubt that the economy is still losing steam and in need of further support measures. "We've seen a little bit of profit-taking ... but I think copper has held up well," said strategist Daniel Hynes of ANZ in Sydney.
"It definitely got a lot of momentum behind it due to these supply issues, and the market is certainly focused on those a lot more than what a strong USD would mean for consumption." Cuts in copper mine output are raising doubts about the extent of a widely expected global surplus that has driven down prices, and the reduced production could support a market rebound. Reflecting a small improvement in demand for local copper supplies, China domestic premiums rose to 65 yuan over front month ShFe prices on Tuesday, after trading at a discount for most of the past month.
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