Copper prices tumbled on Friday, clocking up their seventh consecutive weekly loss as poor factory data in top consumer China sparked alarm in global markets and fanned fears of a slide in metals consumption. Activity in China's factory sector shrank at its fastest pace in almost 6-1/2 years in August as both domestic and export demand dwindled. China stocks posted their biggest weekly decline in more than a month.
The numbers sent investors looking for safety in bonds and gold, put world equities on track for their worst week of the year and US oil on course for its longest losing streak in 29 years.
In metals, data showing China's refined copper imports climbing 6 percent in July was not enough to offset concern over deep structural problems in the Chinese economy. "Hopes of a rebound in (Chinese) growth and demand seem to be fading almost by the day," said Societe Generale analyst Robin Bhar. "There's a real sense that we haven't hit the bottom and there's more downside to come."
Three-month copper on the London Metal Exchange ended down 1.3 percent at $5,055 a tonne, but held above the psychological $5,000 level. The metal, which hit a six-year low at $4,976 a tonne earlier this week, has fallen each week since early July and shed some 20 percent this year. Aluminium closed down 1.7 percent at $1,548 after plumbing a six-year low of $1,541 as surging output overshadowed news that China's exports of aluminium products stalled in July as LME prices and premiums ruptured.
Adding to the China gloom, data showed growth in the US manufacturing sector slowed unexpectedly to its weakest pace in almost two years in August. But giving bearish copper investors food for thought, cash copper traded at a premium of $6 a tonne to the three-month price, its highest level since May, indicating near-term supply is getting difficult to come by.
Nickel ended down 2 percent at $10,200. China's refined nickel imports more than doubled and ferronickel imports trebled from a year ago, but the news was not enough to offset concerns over poor demand from the Chinese stainless steel sector. "The devaluation of the Indonesia rupee is (also) pushing down production costs for nickel ore," noted Gianclaudio Torlizzi, a partner at commodity consultants T-Commodity. Tin slid 2 percent to end at $14,900, hurt by news that Indonesia's top tin miner PT Timah has been granted government clearance to resume exports. Zinc closed down 2.7 percent at $1,767 while lead ended down 0.8 percent at $1,702.