The most-traded June copper contract on the Shanghai Futures Exchange fell 0.6 percent to 42,990 yuan ($6,935) a tonne on Thursday as a flash reading on China's factories showed activity shrank to its slowest in a year, fanning worries about already tepid demand. China's factory activity in April deteriorated more than analysts had expected, suggesting that economic conditions are still worsening despite increasingly aggressive policy easing by the central bank.
"Everyone has probably already decided that demand doesn't look great in China so a miss is not much of a surprise," said analyst Joel Crane of Morgan Stanley in Melbourne. "Beijing are concerned about the sector as an employer but the focus for now is not on supporting industries that are large users of metals," he added.
One sector hampering China's copper demand is its persistently weak property sector, previously a big importer of copper but which now has many companies mired in debt. As China's housing market faces a sharp drop in sales, investors and credit rating agencies face an uphill task trying to calculate how much debt the country's property developers actually hold.
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