Copper slid to the weakest levels in 2-1/2 months on Thursday on worries about global demand for industrial metals after worse-than-expected data on US jobs and European industrial output. Other base metals also turned lower after data showed the number of Americans filing for unemployment benefits unexpectedly rose last week to the highest level in more than a year, raising further concerns about the health of the labour market.
Compounding the gloom, euro zone industrial production fell for a second straight month in March, depressed by every sector except energy. "People are casting around for positive data and they're just not finding it. Any misses on the downside of any of these key economic data points is going to result in base metals taking a hit," said analyst Asa Bridle at Cantor Fitzgerald in London. Three-month copper on the London Metal Exchange closed down 2 percent at $4,613 a tonne after touching a low of $4,600, the weakest since February 25.
A slightly stronger dollar index also weighed on metals, hiking prices for buyers outside the United States. Aluminium ended down 1.2 percent at $1,545 a tonne after hitting $1,538.50, the lowest since April 13. Lead was the biggest loser on the LME, sliding 3.6 percent to finish at $1,711 a tonne, the lowest since April 19. Analyst Wenyu Yao at Thompson Reuters GFMS said lead demand this year was a worry since pollution controls were having an impact, especially in China. "And that's the key reason we remain relatively bearish towards lead's price outlook," Yao told Reuters Global Base Metals Forum.
Zinc failed to trade in closing open outcry activity and was bid down 1.7 percent at $1,870 a tonne after earlier touching the highest levels in more than three weeks at $1,934.50. Zinc had got support after data showed inventories in warehouses registered with the LME continued to erode on Thursday, falling to 391,500 tonnes. The figure is the lowest since July 2009, about two-thirds below the record peak in 2013, although some stock is thought to have been shifted to cheaper storage outside LME warehouses. "The demand picture is looking fairly healthy and then we've got the ongoing supply tightening," said Caroline Bain, senior commodities economist at Capital Economics in London. Zinc's recovery from lows in January, however, probably was overdone and there will be stronger fundamentals in the second half to support prices, she added. Tin ended down 3.3 percent at $16,675 and nickel dropped 2.9 percent to $8,630.
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