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Copper falls on concerns over weak Chinese data

Copper falls on concerns over weak Chinese data

Copper prices fell on Friday due to gloomy data on China's economy, the world's largest metal consumer. However, losses were mitigated by a falling dollar and the hope that these data would prompt Beijing to take more stimulative measures.

The price of three-month copper at the London Metal Exchange dropped 0.4%, to $9,730 per metric ton, in open-outcry official trading. This is down from Tuesday's two-week high.

The data released on Friday revealed that China's factory production growth fell to a new eight-month low during July, while retail sales dropped sharply.

The Shanghai Futures Exchange copper contract eased by 0.1%, to 79.060 yuan (11,008.23 dollars) per ton.

Neil Welsh, Britannia Global Markets' head of metals, said that these indicators indicate a subdued environment for base metals. This is likely to be a factor in the metal prices and consumption, as concerns about a slowing Chinese economic growth are prevalent.

The prices were supported by the hope that weak data will put pressure on Chinese policymakers, who can then roll out additional stimulus measures to stimulate domestic demand.

A weaker dollar also helped the market as investors were cautious in their outlook for interest rates ahead of the import price data.

The dollar's decline makes goods priced in U.S. dollars less expensive for buyers who use other currencies.

U.S. Comex Copper Futures dropped 0.1% to $4.48 lb at 1225 GMT. This brings the Comex Premium over LME Copper to $127 per ton, or 1.3%.

Other metals include LME aluminium, which fell 0.7% to $2.601,50 per ton in official activity, while zinc and lead both dropped 0.3% each to $1.984 and $2.813 respectively. Nickel was up by 0.3%, at $15.075; and tin rose 0.3%, to $33,550.

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(source: Reuters)