Copper prices slid on Monday after data showed that top consumer China’s industrial output was weaker than expected in May, while a firmer U.S. dollar also weighed on the metal.
Three-month copper on the London Metal Exchange CMCU3 was down 1.1% at $9,637 per metric ton as of 0811 GMT, after closing flat last week.
The most-traded July copper contract on the Shanghai Futures Exchange (SHFE) SCFcv1 slid 2% to 78,110 yuan ($10,765.03) a ton.
China’s May industrial output growth slowed to 5.6%, missing a forecast of 6%, amid a property market slump, high local government debt and deflation. However, retail sales accelerated last month.
Prices of copper, often seen as an economic bellwether, jumped in May to record highs on speculative buying amid raw material shortages. They then corrected downward as China’s demand proved weaker than expected.
Some market participants are now bearish on copper, a trader said, expecting SHFE prices to fall below 70,000 yuan.
The dollar was firm as the euro hovered near a more than one-month low amid concerns about the political outlook in Europe.
A stronger dollar makes the greenback-priced commodity more expensive to buy for foreign currency holders.
Data also showed higher aluminium output in China, which combined with a recent surge in Russian imports and weak demand from the construction sector could raise inventories, according to analysts.
LME nickel CMNI3 lost 1.5% to $17,315 a ton, aluminium CMAL3 was down 0.9% to $2,494.50, tin CMSN3 declined 1% to $31,995, while zinc CMZN3 advanced 0.5% to $2,151 and lead CMPB3 rose 0.5% to $2,151.
SHFE nickel SNIcv1 declined 1.6% to 135,170 yuan a ton, aluminium SAFcv1 fell 1.8% to 20,290 yuan, zinc SZNcv1 lost 2% to 23,195 yuan, and tin SSNcv1 dropped 2.4% to 264,900 yuan, while lead SPBcv1 gained 0.9% to 18,730 yuan.
Source: Reuters (Reporting by Siyi Liu and Colleen Howe; Editing by Sonia Cheema and Subhranshu Sahu)