Copper Drops as Investors Not Convinced by China Factory OutputBloomberg News
Copper reversed gains, falling for the first time in five days, as an increase in factory output in China failed to convince investors that stimulus measures were strong enough to lift growth.
Copper declined as much as 1 percent after gaining 0.3 percent. Industrial output grew by 6.1 percent in May from a year earlier, a slight improvement from a March figure that was the weakest since 2008, according to data Thursday from the National Bureau of Statistics. Fixed-asset investment missed estimates, the data showed. China granted an additional 1 trillion yuan ($161 billion) quota to provinces to swap high-interest debt into low-cost bonds on Wednesday to ease a credit crunch.
“China’s industrial production data showed some signs of stabilizing,” said Xu Maili, a Shanghai-based analyst at Everbright Futures Co. “The broader picture is that the economy is still weak, even after government stimulus.”
Copper for delivery in three months on the London Metal Exchange fell 0.9 percent to $5,978 metric ton ($2.71 a pound) at 3:11 p.m. in Hong Kong after four days of gains. On the Comex in New York, futures for July delivery fell 1.2 percent to $2.7155 a pound, while in Shanghai, the contract for August retreated 0.3 percent to close at 43,230 yuan ($6,966) a ton.
The impact of government measures to boost China’s growth remains to be seen, Liu Dongliang, senior analyst at China Merchants Bank, wrote in a note.
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