LONDON Metal Exchange (LME) base metals have closed sharply lower after prices tanked throughout the session, triggered by weak manufacturing data out of China and exacerbated as further data disappointed ahead of a US monetary-policy statement.
At the close of open-outcry trading, LME three-month copper was down some 3.8 per cent, having beached the key psychological level of $US7,000 per ton level and re-entered a bear market.
Lead prices hit their lowest since September 2012, while nickel slipped sharply to hit its lowest price since July 2009.
"In the light of copper or aluminium erasing all their gains, nickel couldn't hold any longer," said Triland analysts.
The house attributed the decline to poor manufacturing data out of the US and China, noting a rise in trading volumes as prices started their spiral downward.
Aluminium sank to its lowest since base metals were dragged down in gold's slipstream during a spectacular price slump on an accumulation of negative price drivers two weeks ago.
The fragility of short-term base-metal rallies since that slide was thrown into stark relief on Wednesday as the market retreated, said Michael Turek at brokerage Newedge.
This was despite a stronger euro against the US dollar, which usually heightens the appeal of the dollar-denominated LME metals.
With some markets absent in Asia and Europe for public holidays, thinner trading volumes made for large price moves.
The slide was triggered by disappointing data overnight. China's official manufacturing Purchasing Managers' Index fell to 50.6 in April from 50.9 in March, underperforming forecasts of 50.9, heightening concerns regarding the outlook for industrial metal demand from the nation, which accounts for 40 per cent of global copper consumption.
Weaker employment data from the US, the world's No 2 copper consumer, added weight to these concerns, sharpening the downtrend.
Private businesses added just 119,000 jobs last month, according to payroll processor Automatic Data Processing Inc and forecasting firm Moody's Analytics. The report was weaker than the gain of 155,000 that many investors had expected.
Meanwhile, declines in US government spending dragged down US construction spending, which dropped 1.7 per cent during March. The readings had negative implications for base metals such as copper used in both the manufacturing of consumer products and piping and wiring in construction.
"The metals feel like they are looking for any excuse to go down and are increasingly moving in isolation from the wider global markets," said Standard Bank analyst Leon Westgate.
"Overnight turnover was painfully thin. With the Chinese returning tomorrow, overnight liquidity should improve dramatically," he added.
Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Tuesday PM kerb
Copper 6790.0-6795.0 Dn 265
Lead 1978.0-1979.0 Dn 48.5
Zinc 1839.0-1841.0 Dn 28.5
Aluminum 1824.0-1825.0 Dn 45.5
Nickel 14820.0-14825.0 Dn 565
Tin 19950.0-20000.0 Dn 415
Aluminum Alloy 1750.0-1760.0 Dn 39
Aluminum Alloy-NASAAC 1715.0-1720.0 Dn 50
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