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Copper: Losses after weak data from Chinese factories

31/05/2024
Categories: Raw materials

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Copper prices fell on Friday after weak manufacturing data in China, the main consumer of metals, but the losses were contained by the possibility of further economic stimulus measures.

Three-month copper on the London Metal Exchange lost 0.2% to $10,112 per ton at 10:00 GMT, after sliding 9% since reaching a record high of $11,104.50 on May 20. Chinese manufacturing activity fell unexpectedly in May as a protracted housing crisis in the world's second-largest economy continued to weigh on business, consumer, and investor confidence

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The official Purchasing Managers Index (PMI) in the manufacturing sector fell to 49.5 in May from 50.4 in April, below the 50 mark that separates growth from contraction.

The most traded copper contract in July on the Shanghai Futures Exchange fell by 1.6% to 82,500 yuan (11,388.89 dollars) per ton. Despite recent losses, LME copper has gained around 2% this month and 19% this year

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The copper recovery was fuelled by speculators and by a short squeeze on the American stock exchange Comex, which sent prices up to a premium of around $1,000 above LME levels.

Comex prices have fallen more than LME prices in recent days, closing the gap to around $180 per ton. June copper futures were down 0.9% to $4.63 per pound

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In other metals, LME aluminum remained unchanged at $2,703.50 per ton, nickel gained 0.3% to $20,125, lead gained 0.5% to $2,287.50, and tin rose 0.5% to $2,287.50 and tin rose 0.6% to $33,300 while zinc slipped 1.9% to $3,013.50.

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