Copper slips as tepid global factory growth blunts demand hopes
By Melanie Burton
MELBOURNE, May 4 (Reuters) - Copper fell for a second session on Wednesday as weak global manufacturing activity unsettled markets only recently soothed by signs of a possible pickup in China's economy.
Global manufacturing growth almost stalled last month as rising prices halted an upturn in new orders, a survey showed.
In China, factory activity shrank for a 14th consecutive month in April, according to a private survey, presenting a mixed picture of the health of the world's No.2 economy and top copper consumer.
"Disappointing manufacturing data in China raised some doubts in investors' minds after the strong rally in recent weeks," ANZ said in a note.
"The recent disappointing data raises some doubt that conditions are conducive to further gains in prices. This should see investors liquidate positions in the coming days."
Three-month copper on the London Metal Exchange had slipped 0.5 percent to $4,896 a tonne by 0706 GMT, adding to 2.6-percent losses from the previous session. Prices on Friday struck their highest in a week at $5,073.50.
Shanghai Futures Exchange copper slid 1.1 percent to 37,200 yuan ($5,725) a tonne.
In other metals, aluminium gave up some of its gains from April. Shanghai aluminium fell 1.9 percent, after last month's more than 7-percent rise.
The recent spike in prices is prompting aluminium producers to restart their plants, Standard Chartered said in a note, adding that 1.7 million tonnes per year of capacity had already been restarted so far this year.
"Given current ShFE prices support nearly 90 percent of China's smelters in profit, further restarts seem likely and should weigh on prices."
As of now, a stronger dollar is weighing on demand for commodities priced in the greenback.
The dollar came off 15-month lows against a basket of currencies reached on Tuesday to hit its highest in three sessions, eroding the purchasing power of buyers paying with other currencies.
Elsewhere, Indonesia's tin exports grew by over 150 percent in April from the month before, potentially dousing prices for the metal which are bumping up against 14-month highs.
PRICES
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin
($1 = 6.4955 Chinese yuan renminbi) ($1 = 6.4974 Chinese yuan renminbi) (Reporting by Melanie Burton; Editing by Himani Sarkar and Joseph Radford)
