Zinc and copper prices fell in Shanghai on Wednesday after data showed that China’s manufacturing sector grew at its weakest pace in more than two years, dampening the outlook for demand in the world’s top metals consumer.
Amid rising headwinds from the Sino-U.S. trade row, China’s official Purchasing Managers’ Index dropped to 50.2 in October from 50.8 in September, only slightly above the 50-point mark that separates growth from contraction.
The latest reading suggests a further slowing in the world’s second-biggest economy and could prompt more policy support from Beijing on top of a raft of recent initiatives.
The most-traded December zinc on the Shanghai Futures Exchange was down 1.8 percent at 21,545 yuan ($3,093) a tonne by 0152 GMT. Copper dropped 1.4 percent to 49,160 yuan.
* LME METALS: Three-month copper on the London Metal Exchange was up 0.1 percent at $6,039 a tonne and zinc was flat at $2,549.
* CHINA’S YUAN: As China’s yuan approaches the 7 to the dollar barrier, investors are betting authorities will eventually let the currency fall beyond the historic level. Yet they are just as confident that China won’t allow the kind of capitulation seen in past market meltdowns.
* NYRSTAR HIT: Falling zinc prices, along with rising energy prices and higher mine operating expenses, caused third-quarter core profit at metals producer Nyrstar NV to drop 74 percent. LME zinc has lost more than 2 percent in October, on course for its eighth monthly loss in nine.
* EQUITIES, DOLLAR: Asian stocks pulled away from 20-month lows to eke out small gains, thanks to a rebound on Wall Street. The dollar hovered near 16-month highs versus a basket of its major rivals.
