Hong Kong - Copper slipped after the largest weekly advance since December 2011 as data showed a bigger-than-expected slowdown in manufacturing strength for China, the largest consumer.
The metal fell as much as 1.3 percent in New York, snapping a seven-day rally. A final April reading for a manufacturing Purchasing Managers’ Index from HSBC Holdings PLC and Markit Economics was 48.9, the lowest in a year and missing the median forecast of 49.4. A level below 50 signifies contraction.
“The slowing growth in China is going to weigh on growth elsewhere,” said Helen Lau, a metals and mining analyst at Argonaut Securities Ltd in Hong Kong. “Basically, this all points to more easing ahead. Restructuring is still going on, so the recovery will not be immediate.”
Copper July delivery on Comex fell 0.9 percent to $2.9035 a pound at 1.57pm in Hong Kong. The London Metal Exchange was closed Monday for a public holiday in the UK.
In Shanghai, copper for July climbed 3 percent to 45,570 yuan ($7,340) a metric ton. The exchange was closed on Friday for a public holiday.
China’s leadership vowed to step up targeted controls to counter downward pressure on the economy, the official Xinhua News Agency reported, citing a Politburo meeting on April 30 at which President Xi Jinping presided.
Policy makers are targeting “long-term healthy development of the property market”, according to a government statement following the meeting. About half of China’s copper consumption is related to its housing and property activity, according to Goldman Sachs Group.
“This sends a signal to the market that China will take steps to ensure stable growth,” Lau said. “This determination by the government will eventually support copper.”
Copper stockpiles monitored by the Shanghai Futures Exchange fell for a fourth week, the longest streak since September, SHFE data showed April 30. Inventories at 188,165 are the lowest since February 19.
A deal was reached to end a strike at BHP Billiton’s ferro-nickel mine in Colombia, the second largest in the world, the company announced on May 2.
Bloomberg