By Zandi Shabalala
LONDON, Feb 28 (Reuters) – Copper prices sank to their lowest in over two weeks on Wednesday as the dollar advanced on prospects of higher interest rates and growth in China’s manufacturing sector slowed in February.
Benchmark copper on the London Metal Exchange fell 1.3 percent to $6,932 per tonne, its lowest since Feb. 13.
“Part of the reason (for the weakness in copper) is the Chinese data which came in weaker than expected,” said FOREX.com analyst Fawad Razaqzada.
“When manufacturers are not as optimistic as before, that tends to weigh on demand expectation for metals and other commodities in general.”
But analysts said the dip in copper, used in power and construction, was most likely short-lived.
“Copper is in an uptrend and the moves lower have been choppy affairs, making it seem likely that these are corrective drops, nothing more,” said Marex Spectron’s Alastair Munro.
USD: The dollar rose to a five-week high against a basket of currencies on Wednesday after Fed Chairman Powell’s upbeat views on the U.S. economy bolstered bets on further interest rate hikes this year.
A stronger dollar makes metals more expensive for holders of other currencies, weighing on prices.
CHINA: Growth in China’s manufacturing sector in February slowed more than expected to the weakest in over 1-1/2 years as Lunar New Year holidays disrupted business activity and tougher pollution rules curtailed factory output.
China is the world’s top metals consumer and its manufacturing sector is often seen as the main bellwether for base metals demand.
CHILE COPPER: Chile produced slightly less copper in January than it did in December, the government said on Wednesday.
SUPPLY CUTS: Norwegian aluminium-maker Hydro is preparing to cut output from Brazil’s Alunorte alumina refinery by 50 percent from March 1, as ordered by an environmental regulator.
ALUMINIUM: The U.S. Commerce Department said on Tuesday it had made a final determination that imports of aluminium foil from China are being sold in the United States at less than fair value and producers are benefiting from subsidies from Beijing.
SPREADS: Short-dated aluminium contracts surged to their highest since November 2016, reflecting a lack of immediately available supply. Aluminium for tomorrow next day (tom/next) — buying tomorrow and selling the day after — delivery traded as high as $12. <CMALT-0>
PRICES: Aluminium ended 0.7 percent lower at $2,132 per tonne. Analysts said the metal had found technical support around $2,140 in the last few sessions.
LEAD INFLOWS: Lead inventories jumped 12 percent by 12,925 tonnes to 125,800 tonnes on Wednesday after falling to their lowest since August 2009.
LME LEAD: Lead was the biggest decliner on the exchange, down 2.9 percent to $2,532 per tonne.
OTHER METALS: Tin shed 0.9 percent to $21,530, zinc dipped 1.1 percent to $3,447.50, while nickel eased 0.3 percent to $13,795.
(Additional reporting by Tom Daly in BEIJING Editing by David Evans and Elaine Hardcastle)
Sorry we are not currently accepting comments on this article.