LONDON: Copper came under pressure on Thursday as weak manufacturing data from top consumer China and a stronger dollar undermined sentiment, though fund buying offered some price support. Benchmark copper on the London Metal Exchange (LME) had shed 0.6% to $9,317.50 a tonne by 1600 GMT, with prices of the metal used in the power and construction industries trading in a narrow $130 range.
"It's the start of the new quarter and funds are buying copper and they are buying equities. China's manufacturing PMI and the dollar are negatives," one copper trader said, adding that volumes were fairly low. Factory activity in China expanded at a slower pace in June as supply chain woes and a resurgence of Covid-19 cases in the export province of Guangdong drove output growth to its lowest in 15 months.
A rising US currency makes dollar-denominated metals more expensive for holders of other currencies, which could subdue demand. Low stocks of lead in LME-registered warehouses - which have eroded by 36% to 80,250 tonnes since mid-March - have fuelled worries about supplies on the LME market and briefly created a premium for cash metal over the three-month contract.
Three-month LME lead slipped 0.3% to $2,266.50 a tonne. LME aluminium fell 0.7% to $2,506, zinc gave up 1.5% to $2,931, nickel ceded 0.6% to $18,100, but tin gained 0.2% to $31,310.