Off The Wire
METALS-Weak China inflation data pushes copper prices to a five-month low
(Updates prices after copper extends fall)
By Polina Devitt
LONDON, May 11 (Reuters) - Prices for copper and other
base metals fell in London on Thursday, hitting multi-month
lows, after inflation data from the top consumer China added to
concerns over the strength of the country's economic recovery.
Benchmark copper on the London Metal Exchange (LME)
was down 3.7% at $8,164 a tonne by 1606 GMT, after touching
$8,152, its lowest level since Nov. 30.
"The copper market has broken down through the key support
level of $8,450, which it was testing for a couple of days. It
is triggered by weak inflation data out of China, where
construction and infrastructure sectors are not doing
particularly well," said Dan Smith, head of research at
Amalgamated Metal Trading.
China's consumer prices rose at the slowest pace in more
than two years in April, data showed on Thursday. Producer
deflation deepened last month, highlighting the broader
economy's struggles to rev-up after the lifting of COVID curbs
in December.
China also has seen a sizeable increase in refined copper
exports over the last couple of months, suggesting that domestic
demand is not as strong as many were expecting, said ING analyst
Ewa Manthey.
Copper inventories in LME-registered warehouses continued to rise on Thursday, reaching 75,950
tonnes, their highest since March 20.
Adding pressure on dollar-priced metals, the dollar index rose, making the metals more expensive to holders of
other currencies, after U.S. jobless claims data strengthened
the case for the Federal Reserve to halt its interest rate
hikes.
LME aluminium was down 2.5% at $2,211 a tonne, after
touching $2,202, its lowest since Oct. 31. Nickel slipped 3.1% to $21,825, also after touching its lowest since
Oct. 31 at $21,710. Zinc fell 3.1% to $2,543, after
hitting $2,537, its lowest since November 2020.
Lead was 1.3% lower at $2,126.3 and tin was
down 2.4% at $25,220.
(Reporting by Polina Devitt; additional reporting by Mai Nguyen
in Hanoi; editing by Shilpi Majumdar)
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