Copper slips as China data stoke demand concerns

LONDON — Copper prices slipped on Monday as Chinese import data reinforced worries about growth in demand for industrial metals fueled by the ongoing US-China trade dispute, while a firmer dollar also weighed.

Benchmark copper on the London Metal Exchange (LME) ended down 0.9% at $6,089 a ton. Prices of the metal used in power and construction have mostly traded in a range between $6,000 and $6,400 since late September.

“The import data is a drag on sentiment though we knew China growth was slowing, we saw that in the PMIs. The truce between China and the United States is under scrutiny, so we wouldn’t expect much upside,” said Julius Baer analyst Carsten Menke.

“Demand is neither strong or soft enough to push prices either way at the moment.”

China’s copper imports fell three percent in November from a year ago to 456,000 tons, but they were up 8.6% from October’s number at 420,000 tons.

The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) for November ticked up to 50.2 from 50.1 in October. The sub-index for new export orders shrank to 47.7 in November from 48.8 in October.

The arrest of Huawei’s chief financial officer by Canadian authorities on Dec. 1 at the request of the US has roiled global markets due to concern it could torpedo attempts to thaw trade tensions between the US and China.

“We doubt the three months allocated to these discussions will be sufficient to adequately address all of the US’ grievances,” said INTL FCStone analyst Edward Meir in a note. “They run the gamut from protecting US intellectual property rights, addressing the issue of ‘forced’ technology transfers, increasing foreign ownership rights, addressing commercial hacking concerns and a push to remove or reduce credit subsidies for Chinese state-owned enterprises.”

The firmer US currency makes dollar-denominated commodities more expensive for holders of other currencies.

Stocks of zinc in LME registered warehouses at 113,875 tons have halved since the middle of August to their lowest in more than 10 years. That, combined with a large position holding between 80% and 89% of warrants and cash contracts, has created nervousness about nearby availability on the LME market.

Three-month zinc fell 0.5% at $2,575 a ton.

Aluminum fell 0.9% at $1,937; lead slid 2.2% to $1,950; tin ceded 0.3% to $18,950; and nickel lost 1.0% to $10,800 a ton. —