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 Global shares slid ahead of what was expected to be a strong set of
U.S. jobs data that could provide the impetus for the Federal
Reserve to raise rates from their record low.
The Chinese stock market, which reopens on Monday after a two-day
closure, has taken a battering on recent economic signals and data
due in the coming weeks is expected to point to further weakness in
the economy of the world's biggest metals consumer.
"The market's getting a bit uneasy about the fact that there's
already been a lot of stimulus but the Chinese economy is continuing
to slow," said Robin Bhar, head of metals research at Societe
Generale in London.
Three-month copper on the London Metal Exchange (LME) was down 1.5
percent at $5,166.50 a tonne by 1011 GMT, eroding the previous
session's 2.4 percent gain on the back of short-covering.
"If this is pretty much the extent of any short-covering, we could
see prices come under pressure again ... I think the shorts will
probably wait to reassess what they do now," SocGen's Bhar said.
Thursday's rally lifted copper from six-year lows below $5,000 a
tonne last week, but a brighter U.S. non-farm payrolls report could
drive prices lower if it bolsters the case for a September rate hike
and lifts the dollar.
A strong dollar erodes the purchasing power of commodities buyers
paying with other currencies.
The Shanghai Futures Exchange was closed for a second day as China
celebrates the anniversary of the end of World War Two, while U.S.
markets will be closed for a Labor Day break on Monday.
"It seems many of the metals had their 'moment in the sunshine'
yesterday with short-covering rallies that look to be finished for
the time being," Kingdom Futures said in a note.
Other metals also fell, with LME nickel down 1.3 percent at $9,870 a
tonne, aluminum off 0.2 percent at $1,626.50 and tin sliding 1.8
percent to $14,925.
Traders said that business remained slow, with little in the way of
a demand upturn as China exits the slow summer season.
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Indonesia, the world's top exporter of tin, shipped none of the
metal in August, trade ministry data showed on Friday, amid
depressed prices and delays in issuing export permits that halted
shipments last month. ID:nJ9N112006]
PRICES
Three month LME copper
Most active ShFE copper
Three month LME aluminum
Most active ShFE aluminum
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
(Additional reporting by Melanie Burton in Melbourne; Editing by
David Goodman)
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