Weak China data pushes industrial metals prices lower

LONDON, June 14 (Reuters) – Prices of most base metals fell on Thursday after data pointed to a slowing of economic growth in China, the biggest metals consumer. Industrial output, investment and retail sales all grew less than expected in May, suggesting further weakness ahead if crackdowns on riskier lending and pollution continue. Also pressuring metals was an interest rate hike and a hawkish tone from the U.S. Federal Reserve on Wednesday, said ABN AMRO analyst Casper Burgering. Higher rates were likely to strengthen the dollar over time, making dollar-priced metals costlier for buyers with other currencies, and thus dampening demand, he said. “It’s a combination of both factors – China and the Fed.” The dollar was slightly higher on Thursday. However, supply and demand fundamentals were still good for most industrial metals, with copper, aluminium and nickel, all of which have reached multi-year highs this year, likely to see further gains, Burgering said. COPPER: Benchmark copper on the London Metal Exchange (LME) traded down 0.8 percent at $7,201 a tonne in official rings, having slipped from a 4-1/2 year high of $7,348 reached last week on concerns that wage talks at the world’s biggest copper mine could disrupt supply. COPPER TECHNICALS: Support was at $7,170 and a break below this could cause prices to slide towards $7,085, Reuters technical analyst Wang Tao said. CHINA METALS OUTPUT: While slower Chinese growth suggested lower demand, China’s output of 10 non-ferrous metals including copper, aluminium, lead, zinc and nickel rose 4.3 percent in May from a year earlier to 4.55 million tonnes. Aluminium production was up 1.5 percent at 2.79 million tonnes. CHINA STEEL: Output surged to a record level in May, which should support demand for steelmaking ingredients nickel and zinc. CHINA POLLUTION: However, production capacity could be curtailed as China expands a crackdown on polluting industry beyond smog-prone Beijing and surrounding cities. NICKEL: Nickel traded 2.3 percent lower at $15,260, reversing a sharp rise seen on Wednesday. Sumitomo Metal Mining, Japan’s biggest nickel smelter, said a global deficit of the metal would grow to 88,000 tonnes this year from 72,000 tonnes in 2017. TRADE DISPUTE: U.S. President Donald Trump is due to unveil revisions to a tariff list targeting $50 billion of Chinese goods on Friday, part of a showdown over trade that could slow global growth and reduce demand for metals.OTHER METALS: LME Aluminium did not trade but was bid down 0.4 percent at $2,266 tonne. Zinc was bid 1 percent lower at $3,185, lead was bid down 0.5 percent at $2,472 and tin traded 0.1 percent higher at $20,900.