The deteriorating economic backdrop overshadowed hopes by many that recent weak data will push major economies like China towards more aggressive stimulus policies.
China's export and import growth came in well below expectations in July, bogged down by weakness in major trading partners and lower commodity prices. The data followed figures showing factory output growth slowed unexpectedly in July to the weakest in more than three years.
Copper imports rose 5.9 percent to 366,548 metric tons in July from June, but analysts were not impressed, attributing this mainly to term contracts and financing deals rather than a pick-up in consumer demand.
"We understand that consumer demand is still sluggish," said CIFCO futures analyst Zhou Jie, pointing to a fall in futures prices as evidence of market nonchalance to the higher-than-expected copper imports.
Three-month copper on the London Metal Exchange fell 0.9 percent to $7,467.50 per tonne by 0706 GMT, extending losses to a third session, but was on track for a 0.3 percent gain on the week.
The most active November copper contract on the Shanghai Futures Exchange fell 1 percent to 54,620 yuan ($8,600) per tonne, snapping four sessions of gains, and was on track to log a 1.3 percent rise for the week.
Losses will be partly capped by hopes of stimulus measures by Beijing to keep growth on track, with Thursday's data also showing consumer inflation fell to a 30-month low, giving room for policy easing.
"The market is divided over whether the Chinese government will further ease monetary policy soon, especially after the large injection of funds into the money markets through reverse repos," said Orient Futures analyst Andy Du.
Still, some investors are hoping such measures by major economies will help spur global growth and metals demand, and are also keeping an eye on the euro zone, after comments by Christian Noyer, a governing council member of the European Central Bank, signaled that the bank may soon intervene in bond markets to help debt-laden Spain and Italy.
Any intervention would be welcome as fortunes of the euro zone's most vulnerable economies have darkened markedly since June, according to a Reuters poll of economists that showed Spain will apply for an EU bailout within months.
The Bank of Japan also signaled on Thursday its readiness to expand stimulus again if risks to the outlook for the world's third-largest economy grow.
BASE METALS: A BEVY OF UGLIES
"Base metals as a whole look bad today, even copper, which would have lost more if not for bargain hunting...," said a Shanghai-based trader with an international firm.
"Shanghai zinc was the biggest victim of the disappointing China trade data, dragging down LME zinc, as there was no support from fundamentals," he added.
Shanghai zinc was the biggest loser by session close, falling 1.1 pct to 14,640 yuan, helping to push LME zinc down 0.9 percent to $1,844.
Zinc prices have been pressured by high Chinese inventories and low global demand from an ailing galvanized steel industry.
Although aluminum has been suffering from equally weak fundamentals, its Shanghai prices were cushioned in the session by thin trading interest.
"Aluminum futures trading is not very interesting with prices so range-bound. You either earn around 200 yuan per tonne or lose by that amount," the trader said.
($1 = 6.3590 Chinese yuan)
(Editing by Ed Davies)
Source: http://www.reuters.com/article/2012/08/10/us-markets-metals-idUSBRE87815520120810
Posts
0 comments