Copper prices edge lower on China concerns, strong dollar * Shanghai Futures Exchange closed on Friday * Euro falls to 4-1/2 year low against dollar * Coming up: U.S. ISM manufacturing PMI London copper slipped on Friday to trade near 4-1/2 year lows pressured by a strong dollar and indications of slowing economic growth in China. Three-month copper on the London Metal Exchange (LME) was down 0.4 percent to $6,273 a tonne at 1032 GMT, not far from $6,230 which it hit last week, its lowest level since June 2010. Chinas factory activity sputtered in December, underlining the challenges facing the countrys manufacturers as they fight rising costs and softening demand in a cooling economy. China is the worlds biggest copper consumer, accounting for more than 40 percent of global refined demand, and slowing Chinese growth raises concerns about the outlook for demand for the metal used in power and construction. A strong dollar also put pressure on copper prices. The dollar was at a 4-1/2 year high against the euro, after the head of the European Central Bank fanned expectations it would take bolder steps on monetary stimulus later this month. A strong dollar makes commodities priced in the U.S. unit more expensive for holders of other currencies. Some analysts believe the copper market may have bottomed out after hefty falls last year, and that global demand could support prices going forward. I am still expecting global real GDP growth of around 3.5 percent in 2015, Chinese growth just a touch above 7 percent and U.S. growth should improve, said Thomas Lam, chief economist at DMG & Partners Securities in Singapore. If you buy into this global growth story, which translates into demand still being pretty moderate and not falling off the cliff, you should see prices gradually getting some support. Copper prices fell by 14 percent in 2014 in their biggest annual decline in three years on concerns that a supply surplus will hit the market next year just as Chinese growth shifts down another gear. (Copper was) a little softer at the end of a year which saw prices come down and some investors losing faith but still the price level is quite high compared with other metals, broker Triland said in a note. Declining ore grades have led to lower production in Chile but on the other hand the slowing growth rate in China is worrying the markets. Data this week showed copper production in top exporter Chile fell for a fifth straight month in November, dropping 7.3 percent from a year earlier. In economic news, euro zone manufacturing ended 2014 on a subdued note as output, new orders and employment all recorded sluggish growth, adding to pressure on the European Central Bank to boost the economy.
Posted on: Fri, 02 Jan 2015 11:17:56 +0000
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