(Across updates, London adds dateline)
LONDON, Nov 15 (Businesshala) – Copper prices hit 2-1/2-week highs on Monday before falling back as economic data in top consumer China unexpectedly showed strong industrial output but weakness in the property sector .
Benchmark copper was down 0.1% at $9,705.50 a tonne by 1215 GMT on the London Metal Exchange (LME), the highest since October 27 at $9,773.
The price has gained about 25% this year after rising 26% in 2020, but has lost momentum in recent months.
Commerzbank analyst Daniel Breesemann said fears of a recession in China have increased as the government is likely to take action if needed to support growth.
He said copper should rally strongly later in the decade as demand picks up and supply dwindles. “The copper market will go into structural deficit in the next few years, but not in the next few months,” he said.
China: China’s industrial production and retail sales grew faster than expected in October, but the metals-intensive property sector fared poorly as construction resumed and investment by developers fell.
Markets: Global equities retreated to record highs and dollar held near 16-month high, making dollar-denominated metals expensive for buyers of other currencies. In China, the yuan weakened and stocks fell.
Squeeze: Supply shortages continued at LME Warehouse Systems, with premiums for cash copper on three-month contracts falling below $100 a tonne for the first time in a month. CMCU0-3
On-warrant copper stocks in LME warehouses have risen to 50,300 tonnes from 14,150 tonnes in the previous month, but are still over 200,000 tonnes in August. MCUSTX-TOTAL
China production: China’s production of 10 non-ferrous metals — including copper, aluminum, lead, zinc and nickel — was 5.26 million tons in October, up 0.5% from September but down 2.6% year-on-year, according to the Bureau of Statistics he said.
Metal prices: LME aluminum fell 0.7% to $2,682 a tonne, zinc fell 0.7% to $3,244.50, nickel fell 1.3% to $19,725, lead slipped 0.4% to $2,350 and tin fell 0.7% to $37,600.