By Fayen Wong
SHANGHAI, Dec 29 (Reuters) - Copper futures slipped on Monday and hit a near-one-month low, pressured by weak demand from top consumer China and a strong U.S. dollar, analysts said.
Growth in China’s economy is expected to slow to 7 percent next year from a forecast 7.3 percent this year, in part due to weakness in global economies, a top Chinese government think tank said on Monday.
China’s cooling economy, which grew at its slowest pace since the global financial crisis in the third quarter, has pinched the country’s demand for copper imports this year. A slew of lacklustre economic indicators this month suggests full-year growth may fall short of Beijing’s official 7.5 percent target for the first time in 15 years.
Three-month copper on the London Metal Exchange was down 0.42 percent at $6,275.75 tonne by 0715 GMT, after having touched $6,232 earlier, a level last seen on Dec. 2. The price of the industrial metal is on track for a 15 percent loss this year, marking its second year of decline.
The most traded March copper contract on the Shanghai Futures Exchange fell 1.01 percent to close at 45,030 yuan a tonne on Monday.
“Copper faces pressure from weak demand and a strong U.S. dollar. Given the lack of positive news, we believe that LME copper may fall further and test the $6,260 level last struck in March,” China’s Capital Futures said in a report.
Reflecting the feeble demand from China, offers for premiums for spot copper from bonded warehouses have been steadily falling in recent weeks to between 80 yuan and 160 yuan ($13-$25).
Copper inventories stored in the Shanghai Futures Exchange’s affiliated warehouses jumped some 14 percent from a week ago to hit a near-five-month high of 105,522 tonnes on Friday.
Looking ahead, analysts said the market would keep an eye on a string of economic data, including U.S. home prices on Tuesday and U.S. weekly jobless claims as well as China’s HSBC Purchasing Managers’ Index on Wednesday.
Analysts at GF Futures brokerage said Shanghai copper prices would be supported at about 43,000 yuan a tonne but struggle to break past 47,000 yuan due to sluggish demand.
The dollar began the final week of 2014 on a firm footing on Monday as the euro flirted with two-year lows. The greenback was within sigh of a 7-1/2-year high against the Japanese yen.
$1 = 6.2225 Chinese yuan renminbi Reporting by Fayen Wong; Editing by Alan Raybould and Sunil Nair