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Copper steadies from month low, but China prospects weigh-2017 China(Guangzhou)Int’l Non-Ferrous Metal（Copper）Exhibition
8/17/2016 有色金属展-铜材展-non-ferrous metals expo |
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Reuters reported that copper steadied recently as a softer dollar provided some support, but slowing growth in top consumer China kept the metal within sight of one-month lows hit the previous session.
Benchmark copper on the London Metal Exchange ended up 0.1 percent at $4,767 a tonne. On Friday, the metal used in power and construction hit $4,750.50 a tonne, its lowest since July 12.
The sell-off last week was triggered by a run of weaker-than-expected data from China. One focus was the pace of fixed-asset investment slipping to 8.1 percent in January to July, the weakest since December 1999.
Mr Robin Bhar, Societe Generale analyst, said that "The data showed economic slowdown after the rebound in the first half engineered by the government, the stimulus seems to have faded already. The softer dollar is helping, but sentiment in copper is looking at the downside, towards $4,500-$4,600."
Traders said that copper''s close below the 100-day moving average on Friday could mean further losses towards the 200-day moving average near $4,730 if downward momentum picks up.
A lower US currency makes dollar-denominated commodities cheaper for non-US firms, a relationship used by funds to generate buy and sell signals. China''s industrial production in July also slowed, as did imports and exports and bank lending, while the property sector also showed signs of struggling.
Barclays analysts said that "What matters to the (copper) demand outlook is not just whether China grows, but how strongly it grows. Consider the fact that a 100 basis point (1 percent) difference in China''s copper consumption growth rate translates to roughly 100,000 tonnes of loss or gained copper consumption."
Three-month aluminium ended up 1.2 percent at $1,676 a tonne, having earlier hit a month high of $1,678. The metal is expected to come under pressure from Chinese exports and an oversupplied market.
Macquarie said that "All signals point to a resurgence in Chinese output. Moreover, ex-China output is also still running at record levels, and on our calculations almost all smelters in the world are making money."
-2017 China(Guangzhou)Int’l
Non-Ferrous
Metal（Copper）Exhibition
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