Copper prices hit six-year lows on Monday as manufacturing data from top consumer China and a slide in Shanghai equities reinforced concerns about its economic growth prospects. Three-month copper on the London Metal Exchange tumbled 1.7 percent to $5,142 a tonne, its lowest since July 2009. The metal used in power and construction was at $5,178 at 1346 GMT from $5,230 at Friday's close.
"The really poor Chinese manufacturing data would be the primary concern for metals," said Sergey Raevskiy, metals research analyst at SP Angel. "There hasn't been any stabilisation of Chinese stocks, despite all the efforts by the government." July manufacturing activity in China fell at its fastest pace in two years, dashing hopes the economy may be stabilising.
The final Caixin/Markit China PMI dropped to 47.8 in July from June's 49.4. The data also reinforced negative sentiment on Chinese equity markets, where the Shanghai Composite Index lost one percent. Traders also cited concern about the ripple effect of slowing activity in China on other Asian economies. Strikes, power problems, lower ore grades, floods and drought, which have tightened copper supplies are unlikely to come into play unless they lead to a significant deficit, traders say. Morgan Stanley reckons disruptions "have all conspired to remove 500,000 tonnes" of copper from the market so far in 2015.
Three-month aluminium earlier touched a six-year low at $1,601.50 a tonne, a drop of more than 20 percent since early May. The metal used in transport and packaging was down at $1,613 from $1,618 on Friday. Aluminium is under pressure from a globally oversupplied market due to Chinese exports. "We see no meaningful reduction in base metals supply with aluminium output up over the last year, while Chilean copper production will also exceed 2014 levels," INTL FCStone said in a note. Zinc fell to $1,882.50, its lowest since December 2013 and was last at $1,897 from $1,916. Lead slid to a five-year low at $1,672 and was last at $1,686 from $1,702.
Tin was lower at $16,100 from $16,300. Nickel slipped to a one-month low of $10,660. It was at $10,735 from $11,045 at Friday's close.Stocks in LME approved warehouses, at 458,838 tonnes, accounting for about three months of global consumption and weak demand from Chinese stainless steel mills are major headwinds for nickel prices.