Copper slipped on Friday as demand worries rose after data showed factory activity in top metals consumer China slumped at the fastest pace in two years last month, with a firm U.S. dollar also weighing on sentiment.
Other base metals also fell although investors refrained from making big moves ahead of a key U.S. jobs report later in the day that could cement the potential for a 50 basis-point Federal Reserve interest rate hike next month.
Three-month copper on the London Metal Exchange CMCU3 dropped 0.8% to $10,288 a tonne by 0441 GMT, after two days of gains.
The most-traded May copper contract on the Shanghai Futures Exchange SCFcv1 was down 0.2% at 73,370 yuan ($11,559.25) a tonne by noon break.
Most Asian factories saw activity slow in March, as slumping Chinese demand and rising raw material costs blamed on the Ukraine crisis added strains to firms already suffering from lingering supply chain disruptions.
China’s financial hub Shanghai was on Friday set to expand COVID-19 curbs to include the western half of the city and extend restrictions in the east where people have already been forced to stay home since Monday.
“The ongoing presence of COVID-19 despite vaccinations is expected to continue to impact both the supply and demand side of the equation for base metals this year, with countries that practise zero tolerance, such as China, most at risk,” said Natalie Scott-Gray, senior analyst at broker StoneX.
DOLLAR: The dollar extended a rebound versus major peers on Friday ahead of the U.S. jobs data. A strong dollar currency makes greenback-denominated metals more expensive to users of other currencies.
CHILE: Copper output in Chile, the world’s largest producer of the metal, fell 7% year-on-year to 399,817 tonnes in February.
LME PRICES: Aluminium CMAL3 slipped 0.3% to $3,480 a tonne, zinc CMZN3 shed 0.2% to $4,164, lead CMPB3 dropped 1.1% to $2,390, and tin CMSN3 lost 0.1% to $42,855.
SHANGHAI PRICES: Aluminium SAFcv1 fell 0.3%, zinc SZNcv1 slipped 0.1%, nickel SNIcv1 slumped 1%, lead SPBcv1 dropped 1%, and tin SSNcv1 shed 0.1%.
Source: Reutrers (Reporting by Enrico Dela Cruz in Manila; Editing by Subhranshu Sahu and Uttaresh.V)
