LONDON: Copper fell to its lowest since mid-March on Tuesday as manufacturing growth in big economies slowed and inventories of the metal rose ahead of key data that will be scrutinised for indications of global economic health.
Copper for three-month delivery on the London Metal Exchange fell to a low of $9,200 compared with a close of $9,320 at the close on Thursday before a long weekend that ended on Monday. It was at $9,208 at 0950 GMT.
"The PMI for China was a bit softer when usually you would expect it to be showing some seasonal strength," Barclays Capital analyst Gayle Berry said.
"That's weighing a bit, I think people believe the tightening measures we're seeing in China are going to have something of a dampening effect on manufacturing."
China's manufacturing growth slowed in April, a survey showed, suggesting that the government's tightening efforts have weighed on the world's second-largest economy, and biggest consumer of copper, more heavily than expected.
And although China's purchasing managers index for its services sector rose in April, the sub-index for the property sector, a major user of copper, remained below a 50 level that indicates expansion for the seventh month.
The market will also be watching the economy of the United States, after data on Monday showed US manufacturing growth continued in April but at a slightly slower pace, and ahead of data including non-farm payrolls this week. The softer tone to US economic data is expected to show up in Friday's closely watched monthly report on employment. Economists surveyed by Reuters forecast that 186,000 jobs were created in April, less than March's 216,000 and not enough to bring the unemployment rate below a lofty 8.8 percent. "In this sort of environment metals are very sensitive to macro news flow, particularly if there are any important data points related to manufacturing and industrial activity," Berry said. In Britain manufacturing activity grew less robustly than expected in April, at its weakest pace in seven months, and a sharp slowdown in new orders cast a cloud over what has been a rare bright spot in the UK economy.
Weighing further on the price, copper's inventories rose by 150 tonnes to 463,800 tonnes, the highest level since last June.
The dollar index, which tracks its performance against a basket of major currencies, was last up 0.3 percent, not far off a three-year low of 72.722 hit this week. A firmer dollar makes the metal more expensive for holders of other currencies.
BID LADEN Al Qaeda leader Osama bin Laden's death appeared to have little impact on commodities on Tuesday.
"Although Osama bin Laden's demise may make the world generally a safer place and the initial impact is on reducing some of the risk premium in risk-related commodities like petroleum and precious metals, it does little to impact the longer-term supply demand situation in the global economy," S&P Senior Director of Commodity Indexes Michael McGlone said.
Tin was at $31,850 from $32,050 while zinc, used in galvanizing was at $2,226 from $2247 at Thursday's close.
Battery material lead was at $2,492 from $2,491 and aluminium was at $2,742 from $2,767. Nickel was at $26,550 from $26,850.
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