METALS-Copper falls from two-week highs as factory activity slows
Updates throughout, changes dateline to LONDON
LONDON, Sept 1 (Reuters) - Copper prices fell more than 2% on Wednesday after data showed that factory activity slowed in August across swathes of Europe and Asia.
In China, by far the biggest metals consumer, manufacturing contracted for the first time in nearly 1-1/2 years. nZUN0037RQ
Benchmark copper CMCU3 on the London Metal Exchange (LME) was down 2.1% at $9,318.50 a tonne at 1112 GMT.
However, prices are still up 20% this year after rising 26% in 2020, with analysts optimistic that demand for the metal used in power grids will increase as the world ditches fossil fuels for electrification.
Copper reached a record high of $10,747.50 in May and a 4-1/2 month low of $8,740 in mid-August.
Fundamentals have improved in recent weeks, said Citi analyst Oliver Nugent, pointing to falling exchange stockpiles, higher Chinese import premiums, lower speculative positioning and expectations for more economic stimulus. MCUSTX-TOTAL, CU-STX-SGH, SMM-CUYP-CN, 3085692MNET
"Fundamentally we think we're at the right levels," he said. "We see copper a little above $9,000 on average next year."
INDUSTRIAL OUTPUT: Factory activity in East Asia, India, Russia and Britain lost momentum in August, surveys showed. Euro zone manufacturing growth remained strong but raw materials prices rose. nL1N2Q3065 nZRN002P9G nZRN002P9H nZRN002PAR nZRN002PAI
MARKETS: Global equities climbed, with European stocks edging closer to record highs as investors hoped for more stimulus. MKTS/GLOB
CHINA: The state reserves administration in China said it released 150,000 tonnes of copper, aluminium and zinc into the market, completing the third round of metal auctions designed to keep a lid on prices. nB9N2PH01I nL1N2Q301E
NICKEL: The premium for LME cash nickel over the three-month contract has risen above $40 a tonne from about zero a week ago, pointing to tighter supply of quickly deliverable metal. CMNI0-3
PRICES: Benchmark LME aluminium CMAL3 was down 1.9% at $2,667.50 a tonne, zinc CMZN3 dropped 0.9% to $2,977.50 and nickel CMNI3 lost 0.8% to $19,395
Lead CMPB3 rose 0.8% to $2,274.50 and tin CMSN3 was up 0.3% at $34,000.
(Reporting by Peter Hobson
Additional reporting by Mai Nguyen in HANOI
Editing by David Goodman
((Peter.Hobson@thomsonreuters.com; +44 207 542 0083;))
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