Copper prices fell to an eight-week low following the release of disappointing economic data from China, the metal’s largest market. Prices dropped by as much as 1.6% to $9,587 per ton on the London Metal Exchange, marking the fourth consecutive weekly decline.
China, the world’s second-largest economy, reported figures on Monday that highlighted ongoing weaknesses. While retail sales showed improvement in May, growth in industrial output and fixed-asset investment slowed, and the housing market downturn deepened.
President Xi Jinping’s government has implemented various measures to support growth and stabilize the property sector. However, the latest data has sparked calls for more robust action. 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 hit a record high above $11,000 per ton last month, has seen a rapid decline due to concerns over rising global inventories and signs of economic weakness in China. Metals also 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 thanks 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%.
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