LONDON: Copper prices eased on Friday on gloomy economic data from top metals consumer China, though losses were cushioned by a weaker dollar and hopes the data would spur Beijing to unleash more stimulus measures.
Three-month copper on the London Metal Exchange fell 0.4% to $9,730 a metric ton in official open-outcry trading, down from a two-week peak hit on Tuesday. Data on Friday showed that China’s factory output growth slumped to an eight-month low in July while retail sales slowed sharply. The copper contract on the Shanghai Futures Exchange eased 0.1% to 79,060 yuan ($11,008.23) a ton.
“In the context of base metals, these indicators suggest a subdued demand environment, likely weighing on metal consumption and prices amid concerns of a slowing Chinese economy,” said Neil Welsh, head of metals at Britannia Global Markets. Prices were supported, however, by hopes that the weak data would raise pressure on Chinese policymakers to roll out more stimulus to revive domestic demand. Also bolstering the market was a softer dollar as investors remained cautious about the interest rate outlook ahead of import price data. A decline in the dollar makes commodities priced in the US currency less expensive for buyers using other currencies.
US Comex copper futures fell 0.1% to $4.48 per lb by 1225 GMT, bringing the Comex premium over LME copper to $127 a ton or 1.3%. Among other metals, LME aluminium shed 0.7% in official activity to $2,601.50 a ton, zinc lost 1.3% to $2,813 and lead slipped 0.3% to $1,984 while nickel was up 0.3% at $15,075 and tin firmed by 0.3% to $33,550.
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