September 1, 2015 / 10:10 AM / 5 years ago

METALS-Copper losses fuelled by China manufacturing data

* China official factory PMI 49.7 in August vs 50.0 in July

* Shanghai stocks start September with losses

* Coming up: US ISM manufacturing survey and vehicle sales (Adds comment, closing prices)

By Pratima Desai

LONDON, Sept 1 (Reuters) - Copper prices fell on Tuesday as expectations of weak demand from top consumer China were fuelled by data showing its manufacturing sector contracting at its fastest pace in three years.

Benchmark copper on the London Metal Exchange (LME) ended at $5,067 a tonne, down 1.3 percent from Friday’s close. The metal used in power and construction hit a six-year low of $4,855 last week.

“Looking at fundamentals, China and demand, it’s not looking terribly healthy,” said Sergey Raevskiy, metals research analyst at SP Angel.

China’s official manufacturing Purchasing Managers’ Index fell to 49.7 in August, from 50.0 in July. The new orders component, a proxy for domestic and foreign demand, fell to 49.7 in August from July’s 49.9. New export orders contracted for an 11th straight month.

Negative sentiment about China can be seen in its equity markets, which started September with losses, tumbling 5 percent at one point.

The markets appeared unimpressed by fresh stimulus measures that included a further relaxation in property investment rules, as well as policies to support mergers, acquisitions and share buybacks by listed companies.

“Commodity prices have been buffeted by volatile swings in Chinese equity and FX markets, as well concerns regarding underlying growth and (the) policy response,” Citi said in a note.

Three-month aluminium ended unchanged at $1,603 a tonne, lead was softer at $1,729.5 from $1,732.50 on Friday and zinc was bid at $1,810 from $1,809.

Tin rose 3 percent to $14,675.

“Tin appears to have broken the downtrend, there are two large holdings of warrants and cash contracts (30 to 40 percent) and liquidity is still low. The funds don’t need much more encouragement,” a trader said.

A tighter LME tin market has pushed up the premium for cash material over the three-month future to around $400 a tonne, towards the six-year high at $540 level seen on Aug. 18.

Nickel fell 3.2 percent to $9,750 a tonne on jitters over demand from Chinese stainless steel mills and rising stocks. The price has fallen more than 30 percent since the start of the year.

Stocks of nickel in LME-approved warehouses, at 453,894 tonnes, account for about three months of global consumption estimated at about 1.9 million tonnes for this year.


Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

$1 = 6.3705 Chinese yuan Editing by William Hardy and David Holmes

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