BEIJING: Prices of copper slid on Friday after data showed China’s factory deflation steepened in May, although the contract was on track for a second consecutive weekly gain on recent measures to support its economy and a weaker dollar.
Three-month copper on the London Metal Exchange slid 0.2% to $8,329 a metric ton by 0426 GMT.
China’s factory gate prices fell at the fastest pace in seven years in May and quicker than forecasts as faltering demand weighed on a slowing manufacturing sector and cast a cloud over the fragile economic recovery.
Regardless, the contract has risen 1.2% so far this week, aided by China’s financial boost and its decision to launch a nationwide campaign to promote automobile purchases and shore up demand in the world’s largest auto market.
The move marks the latest measure to boost spending. Data released this week showing higher auto sales in May and strong solar-related production in March and April fueled hopes of better demand.
The level of water in reservoirs in China’s main producing region Yunnan is still tight and aluminium producers will not resume production at least for the early period this month due to strained power supply, according to a Shanghai Metals Market survey.
Copper prices fall on rate jitters, Chinese stimulus caution
The dollar retreated on Friday, making the greenback-priced commodity more attractive.
The most-traded July copper contract on the Shanghai Futures Exchange was up 0.3% at 66,940 yuan ($9,394.69) a metric ton.
LME LME aluminium gained 0.2% at $2,258.50, lead added 0.3% at $2,042.50, nickel held steady at $21,135, tin rose 1.2% to $26,125, while zinc shed 0.2% to $2,404.
SHFE aluminium added 1.3% to 18,415 yuan a metric ton, zinc up 0.9% at 19,950 yuan, tin rose 2.9% at 213,750 yuan, a one-month high, while nickel fell 1.3% to 158,850 yuan.
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