Copper dropped for the first time in three days after China’s factory output shrank and Japan’s largest manufacturers said they were pessimistic amid the global economic slowdown that has sapped export demand.

Copper for delivery in three months lost as much as 0.6% to USD 8,155 per tonne before trading at USD 8,170 on the London Metal Exchange. The metal rose 7.8% in September, gaining for a second month. December delivery metal fell 0.8% to USD 3.7280 per pound on the Comex.

China’s manufacturing contracted a second month for the first time since 2009, a government survey indicated increasing pressure for measures to reverse a deepening economic slowdown. Big Japanese manufacturers became more pessimistic in the July to September quarter as slowdowns in China and Europe sapped export demand.

Mr Tetsu Emori commodity fund manager at Astmax Limited said that “Data from China and Japan put downward pressure. Trading was relatively thin with Chinese buyers out this week for the National Day holiday.”

The National Bureau of Statistics and China Federation of Logistics and Purchasing said that the Purchasing Managers’ Index was 49.8 in September after 49.2 reading in August.

The Bank of Japan’s Tankan index of sentiment among large manufacturers fell in the quarter ended September to minus 3 from minus 1, the fourth consecutive negative reading, the central bank said today in Tokyo.

Copper will average USD 8,000 per tonne next year and aluminum USD 2,000 per tonne while zinc is expected to average at USD 2,100 lead at USD 2,200, nickel at USD 18,500 and tin at USD 21,000 per tonne.

Source - Bloomberg

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