LONDON: Copper and most industrial metal prices traded lower on Friday after investors were disappointed with modest stimulus measures announced by top metals consumer China to boost its economy.
Three-month copper on the London Metal Exchange (LME) shed 0.6% to $8,436 per metric ton by 1615 GMT after rising on Thursday.
Chinese authorities unveiled measures to boost consumption of automobile and electronics items as part of a broader drive to shore up the country’s faltering economy.
“Everyone is still pretty downbeat in terms of China. There are measures they try to come up with, but the hard numbers still look quite poor in terms of Chinese activity, especially in things like construction,” said Dan Smith, head of research at Amalgamated Metal Trading.
“Europe also looks pretty weak in terms of manufacturing and generally for base metals demand. We expect that the next few months are going to be weak in metals, even for copper, on which we’re more bullish for the medium term.”
For copper, downstream consumption in China was limited in the off-season and supply tightness in the spot market has marginally eased, said Jinrui Futures in a report, adding that downward risk to copper price remained.
A firmer dollar index also pressured the market, making commodities priced in the US currency more expensive for buyers using other currencies.
Also weighing on the market have been forecasts of rising supply. Glencore on Friday reported lower copper, zinc and nickel production in the first half, but expected higher volumes at some of its mines in the second half.
Aluminium producer Norsk Hydro urged the LME in a letter to reconsider a decision not to ban Russian aluminium from its warehouse network as large volumes are jeopardising the benchmark status of its aluminium contract.
LME aluminium rose 0.1% to $2,204 per metric ton and lead climbed 1.3% to $2,135, while nickel slid 2.5% to $20,755, zinc shed 0.5% to $2,371.50 and tin eased 0.8% to $28,500. LME copper, aluminium, nickel and zinc prices are all heading for a weekly loss.
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