Base metals mixed as dismal economic data counters demand hopes

Article content

BEIJING — Prices of base metals were mixed on Wednesday, as dismal data from major global economies partially countered supply concerns and expectations of demand recovery in top consumer China.

Three-month copper on the London Metal Exchange was down 0.3% at $8,095 a tonne, as of 0740 GMT.

Article content

Prices of copper, often used as an indicator of global economic health, have recouped 16% from a 20-month low touched in mid-July, but are down 17% so far this year.

U.S. private-sector business activity contracted for a second straight month in August to its weakest level in 27 months.

Article content

This month also saw business activity in the euro zone contract for a second consecutive month, as consumers cut spending due to a cost-of-living crisis, while supply constraints also hurt manufacturers, a survey showed.

The U.S. dollar steadied just below recent peaks on Wednesday, as investors awaited more clues on this week’s Jackson Hole meeting whether weak U.S. data may slow the pace of Federal Reserve’s rate hikes.

LME zinc climbed 0.2% to $3,491 a tonne, aluminum increased 0.7% at $2,441.50 a tonne, while lead was down 1.2% at $1,953 a tonne.

“Disappointing data fueled bearishness in the market, but still, some investors held a positive outlook given the likelihood of improving demand from China and loosening monetary policy,” a trader said.

Article content

China cut its benchmark lending rate and lowered the mortgage reference by a bigger margin on Monday, adding to last week’s easing measures, as Beijing boosts efforts to revive an economy hobbled by a property crisis and a resurgence of COVID-19 cases.

The fourth quarter is considered a peak season for demand in the world’s biggest metal consumer, buoying near-term market outlook.

The most-traded September copper contract on the Shanghai Futures Exchange rose 1% to 63,420 yuan ($9,235.74) a tonne.

ShFE aluminum rose 2.7% to 19,090 a tonne, zinc gained 0.7% to 25,495 yuan a tonne, while nickel shed 2% to 173,690 yuan a tonne.

For the top stories in metals and other news, click or

($1 = 6.8668 Chinese yuan renminbi) (Reporting by Siyi Liu and Emily Chow; editing by Sherry Jacob-Phillips and Jason Neely)