Shanghai Futures Exchange copper rose 0.3 percent to 36,240 yuan ($5,557) a tonne on Wednesday as sentiment remained shaky after data showed slower service sector growth in top consumer China, following on from a contraction in factory activity and a steep share market selloff this week.
Activity in China's services sector expanded at its slowest rate in 17 months in December, a private survey showed on Wednesday, in a further indication that the world's second-largest economy may be losing steam. "Base metals may still perform poorly (into the second half) on softer global industrial and construction activity, as China transitions from manufacturing to services," said Bank of Merrill Lynch in a research note.
On copper, INTL FC Stone said in a note, "We ... go into 2016 without meaningful cuts, juxtaposed against a backdrop of a growing slowdown in China." "As a result of all this, we see a test and break of the $4,000 mark at one point in the year. On the upside, $5,300 resistance looks reasonable (perhaps late in the year), with an average price of $4,800." In news, Malaysia imposed a three-month ban on bauxite mining, effective from January 15, due to concerns over its impact on the environment in a move that could hurt stockpiles of the aluminium making ingredient in China.
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