Copper prices slipped almost three percent earlier on Thursday, after China's September trade data showed a sharp decline in imports, raising new concerns about demand in the world's biggest user of metals. China's imports of copper last month fell by 26.1 percent compared with September 2015 and, at 340,000 tonnes, were also lower by 10,000 tonnes from August. Its concentrate imports declined last month by 4.1 percent to 1.39 million tonnes.
China's September exports fell 10 percent from a year earlier, far more than expected, while imports unexpectedly shrank after picking up in August, deepening concerns over the latest depreciation in China's yuan currency. "China's September data for copper is pretty poor and fits in with the idea that although demand in China is not that bad, the country does seem to be going through a de-stocking phase," Oxford Economics commodity director Dan Smith said, adding strong production is not supportive of higher prices in the short term.
Three-month copper on the London Metal Exchange closed down 2.1 percent at $4,712 a tonne, having earlier fallen to a one-month low of $4,687. At that point, prices had retreated around 4 percent from a two-month high of $4,889 touched at the end of September.
"In copper, we expect the main catalyst for the downside (for the next 3-6 months) will be accelerating oversupply, but we are also conscious that we are entering a weak seasonal period for demand during which ... inventories tend to build and prices often come under pressure," Goldman Sachs said in a note. China's refined metal production jumped by 12.4 percent in August and is up by 8.7 percent this year at 5.498 million tonnes. Metals prices came also under the pressure after the dollar hit a seven-month high against a basket of six main currencies. US data on Thursday showed the number of Americans filing for unemployment benefits held at a 43-year low last week.
The Fed on Wednesday released the minutes of its last rate-setting meeting, which showed several policymakers felt a rate hike was warranted "relatively soon" if the US economy continued to strengthen. "There will be a US rate hike before the end of the year and that implies further dollar strength, so overall a lot of these markets are going to go lower," Oxford Economics' Smith said.
Three-month zinc fell to its lowest in almost four weeks at $2,210 a tonne, before closing down 1.1 percent at $2,241. Lead fell 1.4 percent to close at $1,995.50 a tonne and nickel closed down 1.3 percent at $10,430. Tin, which did not trade at close, was bid at $19,475, down 1.8 percent. Aluminium bucked the downward trend, closing up 0.5 percent at $1,692, after touching $1,693.50, its highest since August 18.
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