Copper prices retreated across major exchanges on Thursday following the previous day’s five-month high, as demand worries overshadowed supply constraints from declining Chinese output.
Three-month copper on the London Metal Exchange fell 0.42% to $9,934 per metric ton by 0231 GMT, while the most-traded copper contract on the Shanghai Futures Exchange dipped 0.34% to 79,910 yuan ($11,171.69) a ton.
China’s manufacturing activity shrank for a fifth straight month in August, suggesting sluggish domestic demand.
Marginal weakness in terminal demand may reflect a lackluster peak season, though the widespread shutdown of scrap copper rod mills lend strength to copper prices, said broker Galaxy Futures.
Top producer China’s refined copper production this month is set for a rare fall, the first for the period since 2016 as newly introduced tax regulations constrain the supply of scrap copper.
Elsewhere, the dollar softened on weighing data that showed a weakening labour market, which reinforced expectations of interest rate cuts this month.
The dollar index, which measures the currency against six major peers, stood at 98.178 after easing 0.17% on Wednesday.
A weaker US currency makes dollar-priced metals cheaper for holders of other currencies and drives demand and prices.
Meanwhile, Canadian miner Teck Resources has deferred approval of major growth projects until its flagship Quebrada Blanca copper mine in Chile reaches stable operations and achieves its target output, following a miss in production guidance.
Among other London metals, aluminium lost 0.69%, nickel dipped 0.84%, lead fell 0.28%, tin eased 0.45%, and zinc edged down 0.35%.
SHFE aluminium lost 0.7%, nickel dipped 0.51%, lead fell 0.15%, tin eased 0.37%, and zinc declined 1.23%.
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