Copper fell to a two-week low on Friday after trade data from top consumer China pointed to a slowing economy despite recent stimulus measures, denting demand expectations for base metals.
China’s exports fell by the most in three years in February while imports fell for a third straight month, pointing to a further slowdown in an economy which is at its weakest in almost 30 years.
“The optimism that has been built up from an upcoming trade war deal has dissipated as underlying data shows that the picture isn’t as optimistic as everybody expected,” said BMO Capital Markets analyst Kash Kamal.
U.S President Donald Trump said this week that talks aimed at ending a long-standing trade conflict with China were moving along well after he postponed a sharp U.S. tariff hike slated for early March.
The optimism had flowed into base metals, with nickel climbing the most among metals so far this year.
But on Friday, three-month copper ended 0.4 percent lower at $6,395 per tonne, after touching its lowest since Feb. 20.
COPPER: China’s unwrought copper imports fell year-on-year in February to their lowest in 11 months, while copper concentrate imports rose to tie with the all-time monthly record, signalling that the world’s top copper consumer is churning out more metal itself.
STIMULUS: China this week sought to shore up its slowing economy through billions of dollars in planned tax cuts and infrastructure spending, with economic growth hit by softer domestic demand and a trade war.
“Today’s (Chinese) trade data is just further confirmation that the outlook is tentative and (the stimulus) is going to take a while to flow through,” said BMO’s Kamal.
STOCKS: Inventories in LME-registered warehouses stood at 116,725 tonnes, the lowest since 2008. MCUSTX-TOTAL
SPREADS: The premium of cash LME copper over the three-month contract CMCU0-3 was at $35.50 a tonne after touching its highest since January 2015 at $70 earlier this week.
CHINA STOCKS: Chinese bonded copper stocks have risen to 530,000 tonnes, according to the latest data as assessed on Friday by SMM.
INDONESIA: The Indonesian government has approved one-year export allowances for copper concentrate for miners PT Freeport Indonesia and PT Amman Mineral Nusa Tenggara, officials from the Ministry of Energy and Mineral Resources said.
EQUITIES: Investors dumped “risky” assets such as metals and world stocks in the wake of the weak Chinese data, a day after European policymakers slashed growth forecasts for the bloc.
PRICES: Aluminium ended 0.4 percent higher at $1,872 a tonne, zinc finished 0.9 percent lower at $2,711, lead fell 0.7 percent to $2,091, tin slipped 0.5 percent to $21,375 while nickel closed 1.1 percent lower at $13,090.