Wednesday, May 18

Copper dips on slowing China factory activity


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Copper prices fell on Thursday as the dollar firmed and weak manufacturing data from top consumer China raised concerns about demand.

Three-month copper on the London Metal Exchange was down 0.4% at $9,339.50 a tonne by 0640 GMT, while the most-traded August copper contract on the Shanghai Futures Exchange declined 0.1% to 68,200 yuan ($10,551.23) a tonne.

Growth in China’s factory activity dipped to a four-month low in June, while overall Asian manufacturing activity also weakened last month.

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“The slowed production and delays in suppliers’ delivery both reflect raw material shortages and the recent uptick in COVID-19 cases,” Goldman Sachs analysts said in a note.

A stronger dollar, which hit a fresh 15-month high versus the yen and hovered near multi-month peaks against other major peers, also made greenback-priced metals more expensive and less appealing to holders of other currencies.

Cushioning falls in copper prices were data showing that U.S. private payrolls increased more than expected in June as companies rushed to boost production and services amid a rapidly reopening economy.

Copper, widely used in the manufacturing sector, is also often used as a gauge of global economic health.

FUNDAMENTALS

* LME nickel fell 1% to $18,025 a tonne, zinc dipped 0.2% to $2,969 a tonne, ShFE nickel dropped 1.8% to 134,010 yuan a tonne, while ShFE zinc rose 1% to 22,180 yuan a tonne.

* The spread of cash over three-month lead on the LME flipped to a discount of $9 a tonne, from a premium of $29.50 a tonne in the previous session – the highest since March 9, indicating nearby supply tightness has eased.

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($1 = 6.4637 yuan) (Reporting by Mai Nguyen in Hanoi, Editing by Sherry Jacob-Phillips, Aditya Soni)



financialpost.com