Copper declines on concerns about weak Chinese data

Copper prices fell on Friday on the back of bleak economic data from China, the world’s largest metals consumer, although losses were limited by a weaker dollar and hopes that the data would prompt Beijing to roll out more stimulus measures.

Three-month copper on the London Metal Exchange fell 0.4% to $9,730 a metric ton in official trading, retreating from Tuesday’s two-week high.

Friday’s data showed China’s factory output growth slowed to its weakest in eight months in July, while retail sales growth also decelerated sharply.

Shanghai copper futures fell 0.1% to 79,060 yuan ($11,008.23) a ton.

Neil Welsh, head of metals at Britannia Global Markets, said: “In the context of base metals, these indicators point to weak demand, which could weigh on metal consumption and prices amid concerns over a slowdown in China’s economy.”

However, prices found support on hopes that the weak data would increase pressure on Chinese policymakers to introduce more measures to boost domestic demand.

A weaker US dollar also supported the market, as investors remained cautious ahead of import price data. A weaker dollar lowers the cost of dollar-priced commodities for buyers using other currencies.

US copper futures on Comex fell 0.1% to $4.48 a pound by 12:25 GMT, putting Comex’s premium over LME copper at $127 a ton, or 1.3%.

Among other metals, aluminium on the LME fell 0.7% in official trading to $2,601.50 a ton, zinc lost 1.3% to $2,813, lead dropped 0.3% to $1,984, while nickel rose 0.3% to $15,075, and tin gained 0.3% to $33,550.