SG:London copper slips from 3 week peak on sluggish China signals
Reuters reported that London copper eased away from three week highs touched the session before with mixed data on China's manufacturing sector rekindling worries over the state of the world's No. 2 economy and top copper user.
A private sector survey showed that China's manufacturing engine contracted in the Q1 of 2014, while official numbers indicated just a slight increase. Still, market expectations of government stimulus to arrest any loss in momentum are supporting prices.
Mr James Glenn of National Australia Bank in Melbourne said that "It's generally accepted that the Chinese economy is on a slowing trajectory. But we expect global demand to pick up gradually over 2014 as the advanced economies start to see some improvement. Copper would probably hover around current levels in the short term.ā€¯
Three month copper on the London Metal Exchange had eased 0.1% to USD 6,637 per tonne by 0412 GMT. The metal touched USD 6,686 its highest since March 11. The most traded June copper contract on the Shanghai Futures Exchange slipped 0.3% to CNY 46,660 per tonne.
A government survey showed that China's factory activity edged up slightly in March as its official Purchasing Managers' Index increased to 50.3 from February's 50.2. But the final Markit/HSBC PMI fell to an 8 month low of 48.0 in March from February's final reading of 48.5.
According to China information provider Shmet, premiums for copper held in China's bonded areas continue to fall, reflecting a lack of appetite, dropping USD 10 to USD 80 to USD 100 down from USD 120 to USD 140 two weeks ago.
China's Premier Mr Li Keqiang last week sought to reassure investors that Beijing was ready to support a cooling in the economy, saying the government had the necessary policies in place and would push ahead with infrastructure investment.
Elsewhere, Russian aluminium giant United Company Rusal Plc could fall into line with proposed London Metal Exchange rules to cut logjams in warehouses, with a fuller and fair consultation process.
Top copper producer Chile produced 452,509 tonnes of the metal in February, up 7.6% from a year earlier, due to a recovery in an important deposit that encountered operational woes in 2013.
