Shanghai Futures Exchange copper fell 0.5 percent to 38,590 yuan ($6,081) a tonne on Monday, having also struck its weakest since late September. China's factory activity faltered last month, raising concerns that successive easing measures in the world's top metals user are failing to jump start the real economy.
China's factory activity fell for an eighth straight month in October but at a slower pace as export orders flickered into life, a private survey showed on Monday, pointing to continued sluggishness in the world's second-largest economy. "Markets are certainly not factoring in any significant boost from new easing measures in the short term," said analyst Daniel Hynes of ANZ in Sydney. "While we're a bit negative on the macro side, I think we have gotten past the cyclical lows in copper."
China is likely to sell more aluminium on to world markets by offering its struggling smelters cheaper power prices to keep them operating, adding to growing trade tensions with rival producers in countries such as the United States and Russia. "Aluminium production cuts or capacity shutdown are slow, mainly because of local government's support. As well as providing subsidies, local governments are also involved in power tariff negotiations between power suppliers and smelters," Argonaut Securities said in a note.
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