LONDON: Copper prices slid to a two-week low on Wednesday as the dollar rose and worries about demand in top consumer China were reinforced by weak data from the country’s industrial sector.
Three-month copper on the London Metal Exchange (LME) dipped to $8,461 per metric ton, the lowest since Dec. 19. It was last trading at $8,463 a ton, down 0.94% at 1153 GMT.
China’s manufacturing activity shrank for a third straight month in December and weakened more than expected, clouding the outlook for the country’s economic recovery.
Its official purchasing managers’ index (PMI) fell to 49.0 in December from 49.4 the previous month. “We have seen weakness in base metals this year. Recovery in China still looks patchy with the latest PMI data disappointing,” said Dan Smith, head of research at Amalgamated Metal Trading.
Expectations of copper market surpluses can be seen in the discount for the cash over the three-month contract, which at $104 a ton is trading near the 31-year lows hit in November.
China’s appetite for buying metal is expected to shrink after a seasonally strong period of production to meet year-end targets. This weakness can be seen in the Yangshan copper premium, an indicator of import demand, which fell to $67.50 per ton, down 67% from a month earlier.
LME aluminium slipped 1.6% to $2,298 a ton, zinc shed 1.1% to $2,298, nickel lost 1.2% to $16,600, tin went down 0.1% to $25,150 and lead lost 0.2% to $2,059.5.
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