Cop­per slips on trade ten­sions, oth­ers firm on sur­prise China PMI rise

China of­fi­cial fac­tory PMI rises to 51.3 in Au­gust, Cop­per set for 4% monthly drop

Zambian Business Times - - MINING -

In­dus­trial met­als prices were mixed on Fri­day as an un­ex­pected boost in China's man­u­fac­tur­ing sec­tor was off­set by more trade ten­sions be­tween the world's two largest economies.

Cop­per, nickel and tin slipped while alu­minium, zinc and lead were in the black. Some met­als were pres­sured along with global share mar­kets af­ter a re­port that U.S. Pres­i­dent Don­ald Trump has told aides he is ready to im­pose tar­iffs on $200 bil­lion more in Chi­nese im­ports.

"But the waters were mud­died by the fact that the Chi­nese of­fi­cial PMI ticked up in Au­gust rather than fall­ing," said Robin Bhar, head of met­als re­search at So­ci­ete Gen­erale in Lon­don.

The of­fi­cial fac­tory Pur­chas­ing Man­agers' In­dex in top met­als con­sumer China rose to 51.3 in Au­gust, sur­pris­ing in­vestors af­ter an­a­lysts sur­veyed by Reuters had fore­cast it would dip slightly for a third straight month to 51.0. Cop­per has re­cov­ered from a 15-month low of $5,773 a tonne touched on

Aug. 15, but is still a long way off its 2018 peak of $7,348 hit in early June. On Fri­day, bench­mark cop­per on the Lon­don Metal Ex­change fell for a third straight ses­sion and was down 0.6 per­cent at $6,031 a tonne at 1405 GMT. LME cop­per is on track for a 4 per­cent drop in Au­gust, af­ter a 4.9 per­cent slide in July.

"In the short term, we are go­ing into Q4, which is sea­son­ally stronger. But how far can the re­bound go when you've got all these wor­ries about trade ten­sions?" Bhar said.

"And are we go­ing to get head­winds from the fact that Chi­nese and global growth may have peaked and are now slow­ing?"

Cop­per pre­mi­ums: Cop­per has been sup­ported by ro­bust Chi­nese im­port pre­mi­ums for phys­i­cal metal at about $84 a tonne, down from last weeks near two-year high of $86 a tonne.

In­ven­to­ries: Cop­per in­ven­to­ries in ware­houses mon­i­tored by the Shang­hai Fu­tures Ex­change (ShFE) fell 5.9 per­cent from the pre­vi­ous week, while on-war­rant LME cop­per stocks de­clined 4,600 tonnes to the low­est lev­els in about a year, data showed on Fri­day last week.

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