LONDON: Copper prices slipped on Friday on concern over surplus supplies and sluggish demand in top metals consumer China, where the currency is also weakening.
Three-month copper on the London Metal Exchange fell 1.5% to $9,715 a metric ton by 1000 GMT after three days of gains.
The metal used in power and construction has shed 13% since touching a record peak above $11,100 last month.
“The market has been trying to figure out whether the correction phase is coming to an end, but I think it’s still too early to call a turnaround,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“We need data, especially Chinese data, to be more supportive.”
China’s yuan dipped to a seven-month low against the dollar on Friday, hurt by portfolio outflows from mainland financial markets and speculation that the central bank is allowing the currency to weaken gradually.
A weaker yuan usually weighs on industrial metals because it makes commodities priced in the dollar more expensive for buyers in China.
Copper edges up on hopes of stronger demand, stockpiles cap gains
But Hansen said there may be mixed impact at the moment because it may have also spurred some stockpiling.
Brokers in Asia said the drop in copper prices have encouraged more physical purchases this week and provided support around $9,500 to $9,600 a ton.
The most-traded July copper contract on the Shanghai Futures Exchange closed 0.5% down at 79,120 yuan ($10,896.42) a ton.
An overhang of metals has been weighing on the copper market, with SHFE copper stocks showing a tenfold surge since the start of the year to 330,753 tons on June 14, reflecting the abundant supply in top consumer China.
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