LONDON: Copper prices retreated on Friday, weighed down by persistent worries about weak demand in top metals consumer China, but a softer dollar after US jobs data cushioned the losses.
Three-month copper on the London Metal Exchange was down 0.4% at $8,575 per metric ton by 1600 GMT after rising 1.2% on Thursday.
US Comex copper futures dropped 0.7% to $3.87 a lb.
Copper pared losses after US jobs data, which prompted a reversal lower in the dollar index and a decline in Treasury yields.
The mixed report showed the US economy added fewer jobs than expected in July, but solid wage gains and a decline in the unemployment rate back to 3.5% pointed to continued tightness in labour market conditions.
A weaker dollar makes commodities priced in the US currency less expensive for buyers using other currencies.
“We think the recession fears for the US economy are blown out of all proportion. We don’t anticipate any sort of recession,” said Naeem Aslam, chief investment officer at Zaye Capital Markets.
“We believe we will see robust and sustainable growth in copper demand so the current weakness in prices is an opportunity to buy.” “On the Chinese front, the PMIs are in contractionary territory, so that is also causing pressure on metals prices,” Aslam added.
China is expected to roll out further support to boost economic growth, especially in the property and infrastructure sectors, both major consumers of industrial metals, but a series of announcements in recent weeks have offered few details.
There was one bright area in Chinese demand with new orders from the power sector expected to lift operation rates for copper cable and wire producers to 86.8% in August from 84.8% in July, according to the Shanghai Metals Market.
But demand from other copper-related sectors stayed tepid, offsetting some supply tightness in the market, it added.
LME tin dropped 1% to $27,740 a metric ton, pulling back from previous gains driven by a mining ban in third-largest tin miner Myanmar.
Among other metals, aluminium added 0.2% to $2,234.50 a ton and zinc gained 1% to $2,509 while nickel shed 1.4% to $21,315 and lead fell 0.9% to $2,137.
Comments
Comments are closed for this article.