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Copper prices fell in London on Thursday, under pressure from persisting uncertainty over the economic recovery in top metals consumer China and a stronger dollar.
Three-month copper CMCU3 on the London Metal Exchange (LME) was down 0.5% at $8,105 a metric ton in official open-outcry trading.
“Industrial metals trade lower with copper down for a third day with focus on weak China data,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Copper, used in power and construction, is down 0.6% this week. Its uptrend from Oct. 23, when it touched an 11-month low of $7,856 a ton, has been broken, leaving the metal exposed to further losses, Hansen added.
The metal is hemmed in by the 50-day moving average at $8,161 and the 21-day moving average at $8,062.
China’s consumer prices swung back into contraction and factory-gate deflation persisted in October as domestic demand struggled, weighing on the outlook for any broad-based recovery in the world’s second-largest economy.
Data showed a mixed picture of China’s economic performance. Manufacturing activity and exports slowed in October, but imports grew unexpectedly, with copper imports hitting a 10-month high.
“China’s road for economic (post-COVID) recovery remains very gradual amid ongoing property weakness and fragile confidence,” Citi said in a research note.
However, the energy transition and strength in the manufacturing sector, especially seen in the high level of lending it has received, help to offset the demand weakness (for copper) from property sector weakness, Citi added.
The U.S. currency index =USD rose, making dollar-priced metals more expensive for buyers using other currencies, while markets were bracing for remarks from U.S. Federal Reserve Chair Jerome Powell due at 1900 GMT.