LONDON: Copper fell for a fifth consecutive day on Thursday as concerns over the demand outlook from top consumer China pulled prices further from an all-time peak reached earlier this year.
Benchmark copper on the London Metal Exchange (LME) was down 0.2% at $9,446.50 a tonne in official trading, down from a record high of $10,747.50 in May, but still up more than 20% this year.
"We've got forces pulling in opposite directions," said Saxo Bank analyst Ole Hansen. "The longer term bullish narrative hasn't changed much ... (but) the market's a bit worried about the Chinese slowdown," he said.
Copper has slipped below its short-term moving averages, worsening its technical picture. But key support is around $8,700, where copper's 200-day moving average currently sits, Hansen said.
RALLY: Copper is used in power and construction and many analysts expect demand to grow and supply to run short as the world swaps fossil fuels for electrification.
Copper drifts as focus turns to US jobs data
MARKETS: Global equities slipped from record highs and the dollar held most of Wednesday's gains.
JOBS: US jobless claims fell.
FED: A senior Federal Reserve official said the conditions for raising US interest rates could be met by the end of 2022.
COVID: A Chinese health official said he expected a coronavirus outbreak in China to be largely under control within weeks.
FACTORIES: German industrial orders rose more than expected in June.
INFRASTRUCTURE: A $1 trillion bipartisan infrastructure bill faces a test in the Senate on Thursday.
OUTLOOK: Industrial metals will likely fall in 2021 and 2022 with copper averaging $7,500 a tonne in the last quarter of next year, analysts at Capital Economics said.
Aluminium streaks to three-year highs on Chinese power cuts
"Underpinning this view are our forecasts for economic growth to slow in China, a continued rebound in supply from major producers, and a stronger US dollar," they said.
LEAD: The premium for cash lead over three month metal on the LME surged as high as $89, the highest since 2011, signalling low availability of quickly deliverable material.
Lead inventories in LME-registered warehouses at 58,850 tonnes are the lowest since July 2019.
METALS PRICES: LME aluminium was up 0.9% at $2,589 a tonne, zinc rose 0.6% to $2,990, nickel added 0.3% to $19,291, lead gained 0.3% to $2,386 and tin was 0.4% higher at $34,758.