LONDON: Copper prices fell on Friday and were on track for their biggest weekly fall in three months after data demonstrating the sluggish nature of China’s post-pandemic recovery.
Three-month copper on the London Metal Exchange (LME) was down 1.4% at $8,265 per metric ton by 1044 GMT after touching its lowest since July 7 at $8,264. The metal was on course for a weekly decline of 3.6%.
Aluminium, tin and nickel also hit their lowest in more than a month.
“Copper and industrial metals in general have struggled putting up a defence against a string of weak economic data out of China this week,” said Ole Hansen, head of commodities strategy at Saxo Bank.
China’s new bank loans tumbled in July, data showed on Friday, with annual growth of outstanding total social financing (TSF) - a broad measure of credit and liquidity in the economy - slowing to 8.9%. TSF slumped to 528.2 billion yuan ($73.04 billion) from 4.22 trillion yuan in June, missing analyst estimates.
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“Subdued financing to the real economy is likely to constrain metal demand from traditional sources,” said WisdomTree commodity strategist Nitesh Shah.
Concern over the health of the property sector has also resurfaced, with a possible debt restructuring by Country Garden, China’s top private property developer.
“While China has announced several measures of support for the real estate sector in recent weeks, the lack of a large, momentous policy announcement has many disappointed,” Shah said.
Copper and nickel inventories in warehouses monitored by the Shanghai Futures Exchange rose by 1.5% and 15.4% respectively this week. Copper stocks in LME-registered warehouses have had several weeks of arrivals and are now at their highest since June 19, LME daily data showed.
LME aluminium was down 1.4% at $2,172.5 per metric ton, zinc declined 2.4% to $2,398.5 and lead dropped 0.7% to $2,121 while tin slid by 3.4% to $25,970 and nickel lost 1.3% to $20,175.
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