MELBOURNE: London copper slipped on Thursday after China's September trade data showed a sharp decline in exports, raising fresh concerns about the health of the world's No.2 economy and biggest user of metals.
China's September exports fell 10 percent from a year earlier, far worse than expected, while imports unexpectedly shrank after picking up in August, suggesting signs of steadying in the world's second-largest economy may be short-lived.
The disappointing trade figures pointed to weaker demand both at home and aboard, and deepened concerns over the latest depreciation in China's yuan currency.
"It's not really a surprise for us to see a low number for September. The import numbers have mostly been shrinking since March, as China imported too much copper in the beginning of this year, mainly due to the arbitrage between ShFE and LME, and interest rates," said Chris Wu, analyst with CRU in Beijing.
Wu said that China's credit-fuelled housing revival had helped to drive copper demand, but that the impact may be set to fade.
"The lagging effect from the property market is still helping with (demand for) some of the end-use sectors - for example wire, cables and white goods - but we are afraid the boom is close to the end because of tight policy controls," she said.
Three-month copper on the London Metal Exchange had slipped 0.8 percent to $4,776 a tonne by 0710 GMT, after ending flat in the previous session. Prices are falling away from two-month highs above $4,889 touched at the end of September.
Shanghai Futures Exchange copper slipped 0.8 percent to 37,630 yuan ($5,643) a tonne.
China's copper imports fell to 340,000 tonnes in September from 350,000 tonnes in August. Its concentrate imports declined last month by 4.1 percent to 1.39 million tonnes, but were still up a solid 31.9 percent for the year.
"The metal number is weak, but it has been weakening since March. It's no coincidence that (Peruvian mine) Las Bambas has been ramping up this year and more copper concentrate is going to China," said analyst Daniel Morgan at UBS.
China's refined metal production jumped by 12.4 percent in August and is up by 8.7 percent this year at 5.498 million tonnes.
After China set down new measures to cool its overheated housing market earlier this month, it has also tinkered with tools to spur private investment. China hopes to boost private investment by improving financial services for small enterprises, its powerful state planner said on Wednesday.
Meanwhile, the Hong Kong bourse has appointed the former general manager of the Zhengzhou Commodity Exchange as the head of its new commodities platform in mainland China.
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