MUMBAI, 4 Jul (Commoditiescontrol): London copper prices softened on Thursday as higher prices dampened demand, compounded by disappointing economic data that weighed on market sentiment. Three-month copper on the London Metal Exchange (LME) had dipped 0.3% to $9,834.50 per metric ton, retreating from a significant 2% gain in the previous session—the largest daily increase since June 6.
In contrast, the most-traded August copper contract on the Shanghai Futures Exchange (SHFE) rose 1% to 79,890 yuan ($10,987.03) per ton. This divergence highlights regional differences in market dynamics.
Economic indicators are contributing to the cautious outlook for copper. The downturn in manufacturing and service sector PMI suggests a slowdown in the world's top two economies, adding to concerns over future demand. LME copper inventories have surged to 186,450 tons, the highest level since October 2023. Although stockpiles in SHFE warehouses have slightly decreased recently, they remain relatively high.
In the United States, recent data revealed a gradual slowdown in the labor market and a contraction in the manufacturing sector for the third consecutive month in June. Similarly, China's latest figures indicated a continued decline in broader manufacturing activity and the slowest expansion in services activity in eight months.
Earlier this week, copper prices had been rebounding, supported by increased Chinese demand at lower price levels and a weakening dollar, which made dollar-priced metals more attractive to holders of other currencies.
Other base metals showed mixed performance on the LME. Aluminum remained nearly flat at $2,549 per ton, nickel edged up 0.2% to $17,365, while zinc was almost unchanged at $2,991.50. Lead decreased 0.3% to $2,216, and tin fell 0.5% to $33,200.
On the SHFE, aluminum rose 0.3% to 20,485 yuan per ton, nickel increased 0.6% to 138,060 yuan, zinc climbed 0.8% to 24,715 yuan, lead edged up 0.1% to 19,560 yuan, and tin gained 0.9% to 276,070 yuan.
Market participants will continue to monitor economic indicators and inventory levels to gauge future trends in copper and other base metals.
(By Commoditiescontrol Bureau; +91 98201 30172)
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