Business World

China data increase pressure on copper price

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LONDON — Copper fell on Tuesday towards the one-year lows of last month as sentiment already floored by the Turkish lira crisis took another knock from data suggesting weaker demand in China.

Benchmark copper on the London Metal Exchange (LME) closed 1.8% down at $6,044 a ton. The metal used widely in the power and constructi­on industries and often seen as a gauge of economic health fell to $5,988 in July.

“Copper was already on a downtrend on expectatio­ns of a slowdown in China and that has been confirmed by the data today,” said Julius Baer analyst Carsten Menke.

“But dig into the fixed-asset investment data on the property side and you will find reasons for optimism. Property market data is also solid and this part of the Chinese economy consumes a lot of metal.”

The collapse of the Turkish lira to record lows on Monday rippled through financial and commodity markets and boosted the dollar, making metals priced in the US currency more expensive for non-US firms.

Fixed-asset investment growth slowed more than expected to 5.5% in the first seven months of the year, highlighti­ng weakening domestic demand and faltering business confidence amid a showdown with the US on trade.

Real estate investment in China rose 13.2% year on year in July, the fastest pace since October 2016.

To try to stimulate the economy China is expediting plans to invest billions of dollars in infrastruc­ture projects.

US President Donald Trump has rattled the world trade order by seeking to renegotiat­e the terms of some US trading relationsh­ips to combat what he calls unfair trade practices by China, Europe and other countries.

The union at the world’s largest copper mine, Escondida in Chile, said it was closer to a contract agreement and would extend talks another day with mine operator BHP in hopes of averting a planned strike.

Large rises in zinc stocks stored in LME-approved warehouses have created an $16 a ton discount between the cash and three-month contracts from a premium of about $60 a ton at the end of July. LME stocks, at 256,175 tons, have jumped more than 10% since Thursday.

Aluminium ended down 0.6% at $2,070; zinc fell 1.2% to $2,454; lead finished 2.4% lower at $2,074; tin dropped 1.9% to $19,020; and nickel closed down 0.9% at $13,425. —

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