Copper prices fell more than 2% on Wednesday after data showed that factory activity slowed in August across swathes of Europe and Asia.
In China, manufacturing contracted for the first time in nearly 1-1/2 years.
Copper for delivery in December fell 2.3% from Tuesday’s settlement price, touching $4.275 per pound ($9,405 per tonne) on the Comex market in New York.
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The state reserves administration in China also released 150,000 tonnes of copper, aluminum and zinc into the market, on the third round of metal auctions that helped to cool the rally in copper prices.
Prices are still up 20% this year after rising 26% in 2020, with analysts optimistic that demand for the metal used in power grids will increase as the world ditches fossil fuels for electrification.
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Fundamentals have improved in recent weeks, said Citi analyst Oliver Nugent, pointing to falling exchange stockpiles, higher Chinese import premiums, lower speculative positioning and expectations for more economic stimulus.
“Fundamentally we think we’re at the right levels,” he said.
“We see copper a little above $9,000 on average next year.”
(With files from Reuters)