LONDON: Copper prices slid on Wednesday after the currency of biggest metals consumer China slumped, the dollar strengthened and German factory orders dropped, highlighting a weak global economy.
Three-month copper on the London Metal Exchange had given up 1.5% to $8,358.50 per metric ton by 1630 GMT after rising by 0.4% on Tuesday. US Comex copper futures dropped 1.7% to $3.79 a lb.
“Copper is down but not out and I think it’s holding up reasonably well,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Copper lost ground after firm US data fuelled renewed inflation worries and spurred further gains in the dollar index , which touched a new six-month peak.
A firmer dollar makes commodities priced in the US currency more expensive for buyers using other currencies. The US services sector unexpectedly gained steam in August, with new orders firming and businesses paying higher prices for inputs.
LME copper has recovered since touching a 2-1/2 month low of $8,120 in mid-August on hopes for Chinese stimulus, but investors have been disappointed over modest support measures.
China’s yuan fell to a 10-month low against a buoyant dollar before paring some losses after weak economic data from the world’s second-biggest economy.
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