By Ira Iosebashvili and Ese Erheriene
Copper prices closed at a six-year low Monday, as concerns over
demand for the industrial metal grew amid new data showing weakness
in China's economy.
Copper for September delivery, the most actively traded
contract, closed down 0.7% to $2.3460 a pound on the Comex division
of the New York Mercantile Exchange.
The Caixin China manufacturing purchasing managers index, a
measure of factory activity across the country, fell to a two-year
low in July, research firm Markit said Monday. China's official
PMI, released Saturday, also reflected a trend of weak demand amid
a battered property sector and swooning stock market. China is the
world's largest copper consumer, accounting for some 40% of global
demand.
"Clearly, it's disappointing, especially in light [of the fact]
that the Chinese central bank has already implemented many fiscal
measures to counter the slowdown, obviously without having much
success so far," said Daniel Briesemann, a metals analyst at
Commerzbank.
Weak demand in China, ample supply of raw materials and a
stronger dollar sent commodity prices tumbling in July. The S&P
GSCI Total Return Index, which tracks a basket of 24 commodities,
notched its worst monthly loss since November 2008. Copper is
priced in dollars, and becomes more expensive to foreign buyers
when the buck appreciates.
Other industrial metals fell in copper's wake. On the London
Metal Exchange, aluminum for delivery in three months was down 0.4%
to $1,612 a metric ton, the lowest since July 2009. Nickel was down
2.7% to $10,745 a metric ton.
Settlements:
Aug $2.3475, down 2.00 cents; Range $2.3300-$2.3600
Sep $2.3460, down 1.75 cents; Range $2.3215-$2.3630
Write to Ira Iosebashvili at Ira.Iosebashvili@wsj.com
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