LONDON: Prices for copper and other base metals fell in London on Thursday, hitting multi-month lows, after inflation data from the top consumer China added to concerns over the strength of the country’s economic recovery.
Benchmark copper on the London Metal Exchange (LME) was down 3.7% at $8,164 a tonne by 1606 GMT, after touching $8,152, its lowest level since Nov. 30.
“The copper market has broken down through the key support level of $8,450, which it was testing for a couple of days. It is triggered by weak inflation data out of China, where construction and infrastructure sectors are not doing particularly well,” said Dan Smith, head of research at Amalgamated Metal Trading.
China’s consumer prices rose at the slowest pace in more than two years in April, data showed on Thursday. Producer deflation deepened last month, highlighting the broader economy’s struggles to rev-up after the lifting of COVID curbs in December.
China also has seen a sizeable increase in refined copper exports over the last couple of months, suggesting that domestic demand is not as strong as many were expecting, said ING analyst Ewa Manthey.
Copper inventories in LME-registered warehouses continued to rise on Thursday, reaching 75,950 tonnes, their highest since March 20.
Adding pressure on dollar-priced metals, the dollar index rose, making the metals more expensive to holders of other currencies, after US jobless claims data strengthened the case for the Federal Reserve to halt its interest rate hikes.
LME aluminium was down 2.5% at $2,211 a tonne, after touching $2,202, its lowest since Oct. 31. Nickel slipped 3.1% to $21,825, also after touching its lowest since Oct. 31 at $21,710. Zinc fell 3.1% to $2,543, after hitting $2,537, its lowest since November 2020.
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