Hong Kong - Copper fell with aluminium to the lowest in six years amid concern a slowing economy in China will hurt demand in the world’s biggest consumer and as a stronger dollar makes metals less attractive as an asset class.
Copper in London slid as much as 1.7 percent to $5 030 a metric ton before trading at $5 047 by 3.52pm in Hong Kong. Aluminium lost 1.2 percent to $1 549.50 a ton before recovering to $1 558. The Bloomberg Dollar Index strengthened a fourth day and the yuan’s reference rate was little changed from Monday.
China’s economy is growing more slowly than official data suggest, a Bloomberg survey shows, helping explain why policy makers have stepped up stimulus and devalued the yuan to boost exports. The economy expanded 6.3 percent in the first half, compared to the officially reported 7 percent, according to the median estimate of economists surveyed last week.
“Even with signs that funding conditions for infrastructure projects have started to improve, limited evidence has emerged of this materialising in order flow,” Standard Chartered analysts wrote in a note dated August 17. “The evidence suggests that without significant policy support measures, demand conditions will continue to deteriorate.”
In a move that may help overseas sales, China said late on Monday it will speed up the processing and payment of tax rebates to support steady growth of exports. Metals exports already benefiting from tax rebates include aluminium and steel products and shipments have surged to a record this year.
Chinese cities where home prices rose exceeded those where they declined for the first time in 16 months in July, as authorities removed some property curbs and interest rates fell, according to the National Bureau of Statistics on Tuesday. New-home prices rose in 31 cities of the 70 monitored from 27 the previous month, the data show.
Copper in Shanghai closed down 0.9 percent, while Comex futures slid 1.1 percent. All LME base metals fell, except tin.
BLOOMBERG