BEIJING: Copper prices lost momentum on Wednesday as a seven-month low reading in China’s economic data weakened sentiment, though a weaker US dollar lent some support.
Three-month copper on the London Metal Exchange was up 0.3% at $8,057.5 a tonne by 0420 GMT, while the most-traded January copper contract on the Shanghai Futures Exchange slipped 0.3% to 64,650 yuan ($9,056.52) a tonne.
China’s official manufacturing purchasing managers’ index (PMI) stood at 48.0, the lowest reading in seven months, against 49.2 in October, according to data from the National Bureau of Statistics (NBS).
Economists in a Reuters poll had predicted it to come in at 49.0.
“The weaker than expected data somehow curbed previous upbeat sentiment,” a Shanghai-based futures trader said.
Copper prices rallied in the previous session, buoyed by hopes of Beijing loosening its COVID-19 policy after it extended support to the embattled property sector.
J.P. Morgan said its baseline scenario assumes a likely shift in China’s policy to re-opening from next spring, while “the path between now and then could be challenging.”
Globally, investors are awaiting Federal Reserve Chair Jerome Powell’s speech for insights into the US central bank’s monetary policy path.
The dollar index has fallen from a 20-year high hit on Sept. 28, supporting metals prices as it becomes cheaper for non-dollar holders to buy the greenback-priced commodities.
Copper set for weekly drop on demand concerns, stronger dollar
Meanwhile, a trucker strike in Chile that started last week ended on Tuesday after trucker groups signed an agreement with business organisations and the government to improve conditions.
Among other metals, aluminium held unchanged at $2,378.5 a tonne, while zinc added 0.2% to $2,940 a tonne and lead climbed 0.3% to $2,140 a tonne, and tin shed 1.7% to $22,400 a tonne.
SHFE aluminium fell 1.1% to 18,740 yuan a tonne, nickel jumped 3% to 199,530 yuan a tonne, zinc was down 1% at 23,690 yuan a tonne, and tin slid 0.6% to 183,640 yuan a tonne.