Copper hit a six-week low on Monday and headed towards its weakest in six years as the dollar remained firm and trade data from top consumer China reinforced the view that economic growth is slowing. Strong US jobs data on Friday raised the chances of a rate rise in December and pushed the dollar to its highest since mid-April and making dollar-priced metals more costly for non-US investors. The dollar took a breather on Monday, however, but remained firm.
Three-month copper on the London Metal Exchange ended down 0.5 percent at $4,964 a tonne, after touching its weakest level since September 29 at $4,955. Prices are within sight of six-year lows of $4,855 hit in late August. "The dollar is providing downside pressure and ... (there are) concerns over a global growth slowdown," said William Adams, head of research at Fastmarkets.
He said, however: "There is support below the $5,000 area, we've had supply cuts and the market is probably well balanced. All it would take is a slight glimmer of light on the China outlook and that would turn copper around quite quickly." China's trade figures lagged analysts' expectations by a wide margin in October, reinforcing views the world's second-largest economy will have to do more to stimulate domestic demand given the softness in overseas markets.
Also, the Organisation for Economic Co-operation and Development warned that global trade flows had fallen dangerously close to levels usually associated with recession, though actions taken by China and others should ensure a pick-up in 2016. China's copper imports fell 8.7 percent from a month ago to 420,000 tonnes in October, data from the General Administration of Customs showed, though were down just 4 percent for the first 10 months of the year. China is making 6.5 percent a floor or minimum level for annual economic growth in 2016 through 2020, a senior Chinese policymaker said on Monday, adding that the figure would be a base for setting a target for the five-year period.
In other metals, zinc fell 1 percent at $1,644, having earlier touched its lowest since early October at $1,639. Belgium's Nyrstar, the world's top zinc producer, said it may cut up to another 400,000 tonnes of zinc concentrate output if prices remain depressed.
Tin ended down 0.6 percent at $14,550, having touched its lowest since early September at $14,460 after LME data showed tin stocks climbed 505 tonnes to 5,645 tonnes, their highest since early September. Aluminium ended down 0.9 percent at $1,510 a tonne, lead closed down 0.2 percent at $1,659, while nickel ended 0.6 percent lower at $9,580.