China Q2 economic data weigh on copper

LONDON — Copper eased along with most other metals in London on Monday after data showed that China’s economy expanded at a slower pace in the second quarter, pointing to weaker demand.

Benchmark copper edged down 0.70% to $6,192 per ton on the kerb, hovering near one-year lows. Prices are down about 14% in 2018.

Economic activity in the world’s top consumer of metals was hobbled by efforts to contain debt, while June factory output growth weakened to a two-year low as a trade war with the US intensified.

Julius Baer commodity analyst Carsten Menke said the Chinese gross domestic product data pointed to overall stability in the economy but revealed some weakness in the “old economy” or infrastructure sector.

“These segments account for between 40% and 60% of Chinese metals demand and if you have a slowdown in the Chinese old economy this is not good,” he said.

Headline stocks of copper in London Metals Exchange-registered warehouses gained 1,525 tons to 257,200 tons, but were still at their lowest levels since January.

China’s commerce ministry said on Monday it had filed a complaint to the World Trade Organization regarding Washington’s proposed tariff list on $200 billion worth of Chinese goods on July 16.

Copper speculators switched to a net short position of 12,919 contracts, the Commodity Futures Trading Commission said last week, the weakest position since December 2016.

The International Monetary Fund warned on Monday that escalating and sustained trade conflicts are increasingly likely, threatening to derail economic recovery and depress mediumterm growth prospects.

Aluminum added 1.1% to $2,054 per ton, close to its lowest since US sanctions on one of the world’s biggest aluminum producers Rusal on April 6. Aluminum hasn’t escaped the broader industrial metals rout. Right now aluminum traders have much more pressing concerns in the form of a ferocious squeeze on the fast approaching July prompt date. China’s aluminum producers are responding to tighter supply conditions by boosting output, data showed. China’s June output rose by 0.80% to 2.83 million tons, which on daily basis was the highest since June 2017, according to Reuters’ calculations based on official data.

Zinc closed four percent lower at $2,474 per ton, lead fell 1.2% to $2,175, tin fell 1.5% to $19,500 and nickel skidded 2.2% lower at $13,670. —