Copper Prices Fall to Eight-Week Low Amid Weak Chinese Economic Data


Copper prices dropped to an eight-week low after China, the metal’s largest market, released disappointing economic data. Prices fell by as much as 1.6% to $9,587 per ton on the London Metal Exchange, marking the fourth consecutive weekly decline.

China’s economy, the world’s second-largest, revealed weakness in its latest figures. While retail sales improved in May, growth in industrial production and fixed-asset investment slowed, and the housing market downturn deepened.

Despite measures taken by President Xi Jinping’s government to support growth and stabilize the property sector, calls for more robust action have emerged following the latest data. Real estate investment and home prices both saw accelerated declines in May.

“The Chinese property sector continues to weaken despite a series of easing policies,” said Wang Yingying, an analyst with Galaxy Futures Co. “People are very pessimistic about the property market.”

Copper, which reached a record high above $11,000 per ton last month, has experienced a rapid decline due to concerns about rising global inventories and signs of economic weakness in China. Metals faced pressure last week as the Federal Reserve scaled back expectations for rate hikes.

Aluminum prices also fell, dropping by as much as 1.6% to a two-month low below $2,500 per ton. This decline followed data showing record-high production in China last month, as smelters resumed operations due to improved hydropower reserves in Yunnan after heavy rains alleviated drought conditions.

“While China leads output growth, it is close to maxing out,” noted analysts from Bank of America Corp. (NYSE:BAC) led by Michael Widmer. They added that smelters are approaching a government-mandated production cap, which should slow production additions and limit the risk of sustained surpluses.

As of 3:38 p.m. local time on the LME, copper traded 0.9% lower at $9,655 per ton. Other base metals showed mixed results, with aluminum down 0.4% and zinc up 2.1%.