Copper sinks to 1-week low on strong dollar, weaker China economy

Copper tumbled to a one-week low on Monday, with a stronger US dollar, weaker Chinese economic data and elevated oil prices weighing on industrial metals.

The benchmark three-month copper on the London Metal Exchange dropped 0.35% to $13,507.50 a metric ton as of 0719 GMT.

The most-active copper contract on the Shanghai Futures Exchange tumbled 1.40% to close daytime trading at 104,330 yuan ($15,331.82) a ton.

Earlier in the session, the London benchmark hit $13,394.50 a ton, the lowest since May 8, and the Shanghai contract sank to as low as 103,300 yuan, its lowest since May 11.

Brent crude climbed above $110 a barrel on Monday after reported drone attacks on the UAE over the weekend fanned the outlook of higher inflation and dimmed prospects for a near-term Federal Reserve interest rate cut.

The US dollar index rose to its strongest in more than a month, making greenback-denominated commodities less affordable for investors using other currencies.

Elsewhere, top metals consumer China’s economy was showing signs of slowdown in April, according to data from the National Bureau of Statistics.

Factory output grew 4.1% year-on-year, compared with a 5.7% rise in March, and retail sales rose just 0.2%, also cooling from a month prior.

Both readings missed expectations. SHFE-monitored copper stocks continued to flow out, but at a much slower pace last week, dipping only 0.38% week-on-week, according to the exchange’s weekly stock report on Friday.

Elsewhere on the LME, aluminium gained 0.10%, zinc was little changed, dipping 0.01%, lead nudged 0.13% higher, nickel rose 0.72%, and tin ticked 0.12% higher.

On the SHFE, aluminium lost 0.98%, zinc dropped 0.62%, lead declined 0.39%, nickel slipped 0.64% and tin slid 2.58%.