Copper Falls on Weak Chinese Data
By David Hodari
LONDON--Copper prices continued to fall Thursday, with weaker-than-expected Chinese economic data magnifying the jitters currently being felt by traders and sending the base metal to its lowest in nearly a month.
The price of copper was down 1.33% at $6,468 a metric ton in midmorning trade in London, with the rest of the base metals complex also firmly in the red.
Gold prices edged down 0.01% to $1,323.05 a troy ounce, with increased dollar stability extending the precious metal's limited movement seen so far this week.
The WSJ Dollar Index, which measures the dollar against a basket of currencies, was down 0.03% at 85.45.
The price slide experienced by base metals over the past week was compounded early Thursday by the release of Chinese data, which undershot consensus expectations about industrial production and urban development, Commerzbank said in a morning note.
Monthly industrial production numbers for August showed the slowest increase since December, and fixed-asset investments grew at their smallest rate since December 1999, the bank said.
"A downturn in Chinese infrastructure investment would be particularly negative for metals," said Caroline Bain, senior commodities economist at Capital Economics. "That, plus profit-taking is behind copper's fall today."
Copper prices have now unwound by more than 7% since hitting their three-year peak on Sept. 6. With margin-seeking investors selling their copper holdings in to London Metal Exchange warehouses, stocks increased a further 16% during Wednesday trading, according to data from commodities broker Marex Spectron.
The selloff in copper seen so far this week has vindicated the forecasts of analysts who, until last week, were in increasing numbers noting the disconnection between copper's price and its supply-and-demand fundamentals.
Looking ahead, traders were still keeping their eyes peeled for Chinese monetary supply and credit data, due out before the end of the week, as well as fresh LME trader commitment data.
Among precious metals, silver fell 0.17% to $17.74 a troy ounce, palladium gained 0.05% to $940 a troy ounce, and platinum gained 0.15% to $982.25 a troy ounce.
Among base metals, zinc fell 1.12% to $2,996 a metric ton, aluminum fell 1.07% to $2,086 a metric ton, tin gained 0.34% to $20,545 a metric ton, nickel fell 1.84% to $11,230 a metric ton and lead fell 0.8% to $2,280 a metric ton.
Write to David Hodari at [email protected]