LONDON: Copper prices extended losses on Friday, weighed down by weak industrial data in top metals consumer China, a firm dollar and profit-taking following a recent advance to a record peak.
Three-month copper on the London Metal Exchange was down 0.3percent at USD10,882.50 per metric ton by 1715 GMT, the second day of losses after touching a high on Wednesday of USD11,200.
LME copper has gained 5.7percent so far this month and is heading for a third straight monthly gain.
US Comex copper futures slipped 0.4percent to USD5.08 a lb. Data showed on Friday that China’s factory activity shrank for a seventh month in October, dragged down by a drop in new export orders as the boost from months of front-loading to beat US tariff threats finally wore off.
“Today’s China data has weighed on sentiment in the base metals complex,” said Ewa Manthey, commodities strategist at ING. “While near-term demand indicators remain mixed, supply disruptions will keep a floor under prices around the USD10,000 per ton level.” “However, to push that rally further, copper will also need to see strong demand growth, especially from China,” she added.
The most-traded copper contract on the Shanghai Futures Exchange eased 1.7 percent to 87,010 yuan (USD12,215.36) a ton. It also was set for a third straight monthly gain, rising 4.8percent.
Many Chinese buyers have been on the sidelines as prices rallied. The Yangshan copper premium, which reflects demand for copper imported into China, has dropped 28percent over the past month to USD36 a ton.
Also pressuring the market was a slightly stronger dollar index, which was hovering near a three-month peak touched on Thursday. A firmer dollar makes greenback-denominated assets more expensive to holders of other currencies.
Marex warned in a note that copper’s retreat may have further to run, saying: “Caution, we note some indicators are suggesting that further corrective price action could be necessary.”
LME aluminium rose 0.8percent to USD2,887 a ton, shrugging off a jump in LME inventories by a fifth, due to a 102,275-ton inflow to warehouses in Malaysia.
Among other metals, LME nickel was unchanged at USD15,230 a ton, zinc gained 0.5 percent to USD3,051.50, tin climbed 0.8 percent to USD36,075 and lead eased 0.2 percent to USD2,018.
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