LONDON: Copper prices retreated on Thursday after economic data in China underlined worries about sluggish demand in top metals consumer China while rising U.S. interest rates also remain on the radar.
Three-month copper on the London Metal Exchange (LME) fell 0.9% to $8,835 a tonne by 1040 GMT after rising by 1.7% on Wednesday.
China’s annual consumer inflation slowed to its lowest rate in a year in February, reviving investor concern over the pace of recovery.
“We’re not seeing that real demand take off in China and there are still worries about what Powell is saying and if he’s changing his mind,” said Robert Montefusco at broker Sucden Financial.
U.S. Federal Reserve Chair Jerome Powell on Wednesday reaffirmed his message of higher and potentially faster increases to interest rates, but emphasised that the matter was still under debate.
Many investors remain upbeat about the prospects for copper in the medium and long-term, however, and were buying when prices drop to certain levels, Montefusco added.
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“There are technical levels we’re seeing; a lot of buying at the $8,750 support area, which we saw the other day, but right now a lot of people are waiting for the non-farm payrolls.”
U.S. payrolls data on Friday is among the key data points scrutinised by the Fed when it decides on interest rate trajectory.
Easing supply disruptions in major copper-producing countries also weighed on prices.
Panama’s government and Canada’s First Quantum Minerals agreed on the final text for a contract to operate the Cobre Panama mine, with Panamanian authorities allowing the company to resume concentrate loading operations.
Disruptions in Peru and Indonesia have also eased.
LME aluminium fell 0.8% to $2,336 a tonne, zinc dropped 0.7% to $2,955, lead lost 0.7% to $2,076.50 a tonne, nickel was down 1.2% at $23,685 and tin slid 2.6% to $23,130.
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