BR:Copper falls on dollar strength, China growth worries
LONDON: Copper fell on Monday as the dollar rose and after data from China showed a slowdown in the world's top consumer of the metal, although the fact that the figures were in line with expectations helped to limit losses.
China's annual economic growth slowed to 7.5 percent in the second quarter of 2013 from 7.7 percent in the first quarter, in line with the median forecast in a Reuters poll.
Three-month copper on the London Metal Exchange was $6,910 a tonne by 1056 GMT, down 0.6 percent from Friday when it closed at $6,954. It finished last week with gains of 2.4 percent, the biggest weekly rise since early May.
Other commodities, including oil, also fell on Monday, bucking the trend in equities markets. Asian and European shares rose in relief that the China data was in keeping with expectations, and other figures showed a healthy rise in Chinese retail sales.
"The dollar is firming and that seems to be applying a bit of pressure on metals. There are also ongoing concerns about growth in China," Societe Generale analyst Robin Bhar said.
"Clearly China is slowing, and not just short term. Certainly we believe longer term it will slow more towards the 6 percent level, within the next three to four years."
Many commodities are especially sensitive to growth in China. The country accounts for around 40 percent of global consumption of copper, which is used extensively in construction and power cables.
Commodities priced in dollars are also vulnerable to moves in the currency. The dollar's strength on Monday made copper more expensive for holders of other currencies.
But currency market participants were cautious ahead of Federal Reserve Chairman Ben Bernanke's congressional testimony on July 17-18, which will be closely watched for more clarity on the central bank's intentions.
Improved retail sales data on Monday could hasten moves by the Federal Reserve to unwind it stimulus programme.
In other metals, tin was at $19,450 per tonne from a last bid of $19,500 on Friday, lead was at $2,063 from a last bid $2,071, aluminium was at $1,830 from a last bid $1,843, and nickel was was at $13,700 from a last bid $13,750.
Zinc was $1,892 from $1,903 at the close on Friday.
