SINGAPORE, May 9: London copper slid more than 1 percent on Thursday, taking a breather after climbing to its highest in more than three weeks in the previous session on expectations of higher demand from top importer China following stronger trade numbers.
A string of positive data from China’s better-than-expected trade numbers to an unexpected rise in Germany’s industrial output and upbeat U.S. Payrolls has underpinned industrial metals this week.
‘We have already seen a very strong rally in copper so I wouldn’t be surprised to see some kind of correction,’ said analyst Bonnie Liu at Macquarie in Singapore.
‘I would not say that fundamentals are driving the market down because data looks promising and we believe there will be further strength in prices.’
Three-month copper on the London Metal Exchange slid 1.1 percent to $7,340 a tonne by 0335 GMT after hitting $7,480 a tonne on Wednesday, its highest since April 12.
The most-traded September copper contract on the Shanghai Futures Exchange gained around half a percent to 52,920 yuan a tonne, tracking Wednesday’s gains in LME copper.
CHINA CONSUMER INFLATION CLIMBS
Analysts said higher consumer inflation in China could also be pressuring prices.
China’s annual consumer inflation quickened to 2.4 percent in April from March’s 2.1 percent due to higher food costs, data showed on Thursday, above market forecasts and limiting room for loosening monetary policy to support sputtering economic growth.
Investors betting on fresh policy easing by the People’s Bank of China could be disappointed given its move on Thursday to issue three-month bills to mop up some liquidity from the money market.
China’s exports and imports grew more than expected in April, offering the possibility of a better outlook for the world’s second-largest economy.
Also helping boost sentiment was data showing German industrial output unexpectedly rose in March, beating even the highest forecast in a Reuters poll.
Aluminium fell 0.7 percent to $1,895 a tonne, while zinc lost 0.4 percent to $1,886 a tonne and tin gave up 0.8 percent to $20,572. Nickel fell 0.3 percent to $15,365 a tonne. (agencies)
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