METALS-Metals prices fall with concerns over strength of China's economic recovery

Reuters · 05/11/2023 10:47
METALS-Metals prices fall with concerns over strength of China's economic recovery

Updates throughout, adds London dateline

- Prices for copper and other base metals fell in London on Thursday, touching multi-month lows, after inflation data from the top consumer China added to concerns over the strength of the country's economic recovery.

Benchmark copper CMCU3 on the London Metal Exchange (LME) was down 1.5% at $8,347.5 a tonne at 1022 GMT, after touching $8,321, its lowest level since Jan. 5.

"The copper market has broken down through the key support level of $8,450, which it was testing for a couple of days. It is triggered by weak inflation data out of China, where construction and infrastructure sectors are doing particularly well," said Dan Smith, head of research at Amalgamated Metal Trading.

Copper may go down further in the couple of days, he added.

China's consumer prices rose at the slowest pace in more than two years in April, data showed on Thursday. Producer deflation deepened last month, which taken together with the CPI data, highlights the broader economy's struggles to rev-up after the lifting of COVID curbs in December.

China also has seen a sizeable increase in refined copper exports over the last couple of months, suggesting that domestic demand is as strong as many were expecting, said ING analyst Ewa Manthey.

Copper inventories in LME-registered warehouses MCUSTX-TOTAL continued to rise on Thursday, reaching 75,950 tonnes, their highest since March 20.

Adding pressure on dollar-priced metals, the dollar index =USD rose, making the metals more expensive to holders of other currencies.

LME aluminium CMAL3 was down 0.4% at $2,258 a tonne, after touching $2,215.5, its lowest since Oct. 31. Nickel CMNI3 slipped 1.4% to $22,210, also after touching its lowest since Oct. 31 of $22,010. Zinc CMZN3 fell 0.7% to $2,606.5, after touching $2,575, its lowest since February 2021.

Lead CMPB3 was 0.7% lower at $2,122.5 and tin CMSN3 was stable at $25,840.

(Reporting by Polina Devitt; additional reporting by Mai Nguyen in Hanoi; editing by Shilpi Majumdar)


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