Reuters reported that London copper fell after data from top consumer China showed manufacturing activity continued to contract while prices came under more pressure as a poor reading from France pushed the euro down against the dollar.
Manufacturing in China contracted for an 11th month in a row in September, according to a private sector survey of factory managers that indicated the world's second largest economy remains on track for a seventh quarter of slowing growth.
French business activity tumbled at its fastest rate since April 2009 raising worries of a deepening recession and pushing the euro down, although a German private sector contraction eased in September.
Ms Bonnie Liu Singapore based analyst of Macquarie said.
Said that still China's PMI number, which provides the first glimpse of September's conditions for Chinese industry, seems to point to a month in which a slide was halted but not reversed, suggesting limited downside for prices.
Ms Liu said that "We do see some things getting better from September as orders filter down into the market. The macro environment is improving and so are orders for cement, steel and copper. Still prices are not going to move up much because that demand is not that strong it's only a seasonal pick up for the Q4."
Three month copper on the London Metal Exchange fell by 1.21 percent to USD 8,248.75 per tonne by 0736 GMT. Copper hit its highest since May 2 at USD 8,422 per tonne in the previous session. Prices came under pressure as some participants took profits on copper's recent price strength after the China data failed to show more concrete recovery.
The most traded January copper contract on the Shanghai Futures Exchange slipped 2% to close at CNY 59,310 per tonne. The euro fell to a one-week low against the dollar on Thursday after the French data. A stronger dollar makes commodities priced in the greenback more expensive for those holding other currencies.
French business activity took a sharp turn for the worse in September, shrinking at its fastest rate since April 2009 as weak domestic demand and a deepening slowdown in southern Europe dragged the euro zone's No 2 economy towards contraction.
Of the metals, tin was the worst hit, falling nearly 5% at one point to USD 20,441 per tonne as dollar strength triggered chart based selling when prices pierced support at the 200 day moving average near USD 20,800.
(www.steelguru.com)
