LONDON: Copper prices retreated on Thursday on worse-than-expected factory data in top metals consumer China and rising inventories that highlighted excess supply.
Three-month copper on the London Metal Exchange (LME) slipped 1.2% to $9,112 per metric ton by 0940 GMT, after rising 2.8% in the previous session.
Those gains were largely due to investors locking in profits from short positions to take advantage of recent weakness, traders said.
LME copper has given up 18% since touching a record peak of $11,104.50 in May, weighed down by worries about weak demand in China.
The concerns were deepened after surveys over the past two days showed a sluggish manufacturing sector, with activity in July shrinking for the first time in nine months as factory owners struggled with poor demand.
Investors have been disappointed that China has not announced major stimulus measures to boost the economy.
Copper up on hope for China’s stimulus after weak factory data
“It’s a guessing game on China. The data is indicating that they need to make a bolder move, make an announcement fairly soon,” Nitesh Shah, commodity strategist at WisdomTree.
“They had the politburo meeting, which could have been a great opportunity to articulate something meaningful and bold, but they didn’t really do that.”
High inventories in exchange-approved warehouses are also dampening the market, with LME copper stocks having more than doubled since the start of June and touching the highest in nearly three years.
A firmer dollar index also weighed on metals prices, making commodities priced in the U.S. currency more expensive for buyers using other currencies.
In other metals, LME aluminium dipped 0.1% to $2,289 a ton, zinc slipped 0.2% to $2,671, lead lost 0.2% to $2,079.50, nickel eased 1.1% to $16,425 and tin fell 0.7% to $29,850.
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