By Julian Luk
LONDON, Nov 7 (Reuters) – Copper prices retreated from one-month highs on Tuesday under pressure from a stronger dollar and Chinese trade data suggesting that economic recovery in the world’s biggest consumer remains uneven.
Three-month copper CMCU3 on the London Metal Exchange (LME) fell 1% to $8,150 per metric ton in official rings after reaching $8,260 on Monday for its highest since Oct. 2.
A stronger US currency, which makes dollar-priced commodities more expensive for holders of other currencies, was weighing on prices of industrial metals. FRX/
China’s imports grew unexpectedly in October while exports contracted at a faster pace, highlighting the challenges the world’s second-largest economy faces at home and abroad.
“China’s recovery is still uncertain and metals are likely to see some continued volatility for a while, at least in the near term,” said ING commodities strategist Ewa Manthey.
“Until the market sees signs of a sustainable recovery and economic growth in China, we will struggle to see a long-term move higher for industrial metals.”
China’s October imports of unwrought copper and copper ores both rose from a year ago, but Manthey said that was partly because of the low base from the same period last year when the country was still under lockdown.
Looking ahead, clues to Chinese demand will come from loan data due over the next few days. Among the most closely watched by metals markets will be data on total social financing.
Worries about demand and lack of concern over refined copper supply has created a large discount for cash copper over the three-month contract CMCU0-3. The discount has climbed to a 31-year high around $84 a ton.
In other metals, aluminum CMAL3 declined 1% to $2,263 a ton, nickel CMNI3 shed 3.2% to $17,850, zinc CMZN3 loses 0.8% to $2,552 and lead CMPB3 eased by 0.5% to $2,170 while tin CMSN3 was down 0.9% at $24,450.
(Reporting by Julian Luk in London Editing by David Goodman)
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