Shanghai Futures Exchange copper ended down 0.2 percent on Monday as analysts flagged prospects of a correction given strong price gains over the past month and disappointing factory activity from China. Shfe aluminium stocks which have been climbing all year, hit the highest since May 2013, at 473,000 tonnes, as traders stockpile metal in warehouses in case of winter cuts, encouraged by financeable spreads.
China's factory output grew 6.4 percent in July from a year earlier, while fixed-asset investment expanded 8.3 percent in the first seven months, both below economists' forecasts. "The metals sector remains even more vulnerable than other sectors (to a correction) due to the strong rally it has enjoyed over the past month," said ANZ in a report.
China's aluminium output fell 8.2 percent in July from a record high a month earlier, data showed on Monday, as capacity cuts that have sent prices to multi-year highs start to take their toll on the country's output. Shfe aluminium and nickel fell nearly 2 percent, following last week's strong gains. Reflecting ample available supply, Shanghai aluminium and copper inventories surged, weekly inventory data on Friday showed.
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