Copper falls as weak China data fuels demand worries
Copper prices slipped on Wednesday after weak Chinese trade data fuelled worries about demand from the world’s top metals consumer, overshadowing the easing of COVID-19 restrictions in the country.
Three-month copper on the London Metal Exchange CMCU3 dropped 0.9% to $8,345 a tonne by 1050 GMT after rising by 0.4% on Tuesday.
Weighing on the market was data showing China’s exports and imports in November shrank at their steepest pace in at least 2-1/2 years.
LME copper has gained about 12% since the beginning of November, largely on hopes for a recovery of demand in China due to easing of coronavirus restrictions and measures to support the troubled property sector.
“From our perspective, we’re not expecting a sudden turnaround in China’s property market in the near-term,” said Edward Gardner, commodities economist at Capital Economics.
“We think perhaps this rally was a bit overdone and the fall in prices today is quite justified, coupled with the fact that global manufacturing and services PMIs are in contractionary territory as of November, in particular the new orders component.”
The most-traded January copper contract on the Shanghai Futures Exchange SCFcv1 lost 0.7% to 65,440 yuan ($9,378.18) a tonne.
Cushioning losses was news about China announcing the most sweeping changes to its tough anti-COVID regime since the pandemic began three years ago.
Also providing some support was a slightly weaker dollar index =USD, making commodities priced in the U.S. currency cheaper for buyers using other currencies.
Among other metals, LME aluminium CMAL3 shed 1% to $2,484.50 a tonne, nickel CMNI3 eased 1.2% to $28,925, zinc CMZN3 dropped 1.2% to $3,118, lead CMPB3 fell 0.4% to $2,212 and tin CMSN3 slid 3.8% to $23,860.
Source: Reuters (Reporting by Eric Onstad Editing by Vinay Dwivedi)