London copper steadies near three-month lows as trade tensions simmer

MELBOURNE — London copper was steady near its lowest since late March on Monday after China’s manufacturing growth tempered in June, reflecting a slowdown in the real economy and simmering trade tensions with the United States.

Growth in China’s manufacturing sector slowed in June after a better- than- expected performance in May, official data showed, as escalating trade tensions with the US fueled concerns about a slowdown in the world’s second-biggest economy.

A private survey on Monday also showed that China’s factory growth cooled slightly.

“Data over the weekend is likely to see investors question whether there are more clouds ahead for the sector,” wrote ANZ in a report.

“This is likely to raise concerns that China’s GDP ( gross domestic product) growth will weaken further in H2 2018.”

London Metal Exchange (LME) copper was at $6,632.50 a ton by 0259 GMT, up 0.10% since Friday. Prices fell 3.3% in June, the biggest monthly loss since September. Shanghai Futures Exchange copper traded little changed at 51,490 yuan ($7,764) a ton.

LME zinc and aluminum were the worst performers last month. LME zinc gave up 8% as supply recovers after a year of deficit drove prices to decade highs and encouraged restarts while aluminum fell 7% as China output continues to increase. LME zinc climbed by 0.60% to $2871 while LME aluminum was flat at $2134.50.

Trade tensions have cast a chill on global manufacturing hubs, throwing up headwinds for metals demand.

Japanese manufacturing activity grew at a slightly faster pace in June, but export orders fell more than initially reported in a worrying sign of the potential impact of a heated trade dispute between the US and major economies. Business confidence among Japan’s big manufacturers’ worsened for a second straight quarter in the three months to June, a closely watched central bank survey showed, as rising input costs and US trade protectionism cloud the outlook.

Hedge funds and money managers cut their net long position in copper by 29,240 contracts to 22,061 contracts, CFTC data showed. This was the weakest position since early May in the week to June 26, US Commodity Futures Trading Commission (CFTC) data showed on Friday.

Indonesia’s state-owned mining holding company PT Inalum is close to finalizing a multibillion-dollar deal to acquire a majority stake in the giant Grasberg copper mine, government officials said on Saturday. —