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Copper prices slid on Monday as disappointment with China’s growth target hit sentiment ahead of U.S. data that could influence the direction of interest rates and the dollar.
Traders said that U.S. Federal Reserve Chairman Jerome Powell’s testimony on Tuesday and Wednesday will also be closely scrutinised for clues on the outlook for U.S. interest rates and the dollar.
Benchmark copper CMCU3 on the London Metal Exchange (LME) was down 1.8% at $8,833 a tonne by 1133 GMT. It gained more than 3% last week after a Fed official said he favoured steady quarter-point increases to interest rates.
“China’s growth target wasn’t very encouraging for industrial metals markets,” one metals trader said. “Focus this week will be on Powell and the monthly U.S. jobs report.”
Top metals consumer China set a modest target for economic growth of about 5% this year as it kicked-off the annual session of its National People’s Congress (NPC) on Sunday.
The widely watched U.S. non-farm payrolls data due on Friday is expected to show 200,000 new jobs were created in February.
“A wide divergence from that 200,000 could change views on U.S. interest rates,” another trader said.
Also weighing on copper were rising inventories MCUSTX-TOTAL.
Stocks in LME-registered warehouses are up more than 10% since March 1 at 72,400 tonnes. In warehouses monitored by the Shanghai Futures Exchange CU-STX-SGH socks have fallen in recent days but are still up more than 340% since late December at 240,980 tonnes.
Traders say the discount for the cash LME contract over three-month copper CMCU0-3 at about $25 a tonne suggests the market is not worried about supplies on the LME market.
In other metals, aluminium CMAL3 fell 1.7% to $2,363 a tonne, zinc CMZN3 shed 2.3% to $3,006, lead CMPB3 gained 0.3% to $2,126, tin CMSN3 was down 2.2% at $24,215 and nickel CMNI3 eased by 0.6% to $24,450.