(Updates prices, adds analyst comment and LONDON dateline)
By Eric Onstad
LONDON, April 27 (Reuters) - Copper prices touched their
lowest in more than a month on Thursday, pressured by weak
demand in top metals consumer China and an expected slide into
recession in some Western countries.
Three-month copper on the London Metal Exchange dropped 0.9% to $8,479 a tonne by 1015 GMT after hitting its
lowest since March 16.
Data on Thursday showed that profits at Chinese industrial
companies fell 19.2% in March, underlining fragility in a sector
that is a key consumer of metals.
"China's recovery from COVID and from the weakness last year
is only taking place gradually in the industrial and
construction sectors," said Edward Gardner at Capital Economics.
Chinese companies that make copper products told Reuters
they are cutting output for the second quarter, typically the
peak demand season, because of a slower than expected recovery
in domestic consumption after COVID-19 and sluggish exports.
The most-traded June copper contract on the Shanghai Futures
Exchange fell 0.8% to 66,560 yuan ($9,612.66) a tonne.
Chinese demand is expected to weaken more next week as the
country enters a May 1-3 holiday. There have been some imports of copper into China backed by
open import arbitrage, but with the holidays next week the LME
price could lose as much as $300 a tonne in the next few
sessions, one trader said.
Wider global economic concerns fuelled by weak data from the
United States is also weighing on the market, Gardner added.
"We expect the U.S. economy later this year to enter into a
soft recession and we think over the next few months industrial
metals prices will struggle, fall a bit further, due to
developed economy weakness," he said.
Denting sentiment further were troubles in the U.S. banking
sector.
LME aluminium shed 0.8% to $2,309.50 a tonne, zinc dropped 1.6% to $2,604, tin was down 0.8% at
$25,550 while nickel added 0.4% to $23,740 and lead rose 0.2% to $2,110.
For the top stories in metals, click ($1 = 6.9242 yuan)
(Reporting by Eric Onstad
Additional reporting by Mai Nguyen in Hanoi
Editing by David Goodman
)
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