LONDON: Copper prices slipped on Monday on worries that top metals consumer China wants to put a lid on surging commodity prices to head off potential inflation.
Concern about faltering demand and rising copper inventories also weighed on the market.
Benchmark copper on the London Metal Exchange (LME) had fallen 0.9% to $8,845 a tonne by 1600 GMT.
Copper has gained about 30% over the past five months, having touched a 9-1/2 year peak of $9,617 in late February.
“The real focus right now is those very high PPI (producer price index) numbers, both from China and the US, and China potentially implementing measures to curb commodities-led inflation,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Chinese factory gate prices (PPI) in March rose at their fastest annual pace in nearly three years, data showed on Friday.
Chinese Premier Li Keqiang emphasized the need to strengthen market regulation of raw materials to ease the cost pressure of enterprises amid rising global commodities prices, China’s official Xinhua news agency reported on Sunday.
LME copper inventories touched their highest in five months on Monday, having more than doubled since the start of March.
Also weighing on the market were indications of weak demand in China as the Yangshan copper premium fell to $51 a tonne, its lowest since Nov. 20.
Russia’s Nornickel said on Monday that it would fully restart operations this month - earlier than previously expected - at one of two major mines hit by flooding.
LME nickel slid 3% to $16,135 a tonne.
LME aluminium fell 0.3% to $2,258 a tonne, lead dropped 0.2% to $1,974, zinc shed 2.6% to $2,757 and tin lost 0.4% to $25,665.—Reuters
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