Base metals on the London Metal Exchange (LME) have closed mixed as falls in regional equity markets and a weaker euro following downbeat economic data spurred selling, dragging some of the metals into the red from an overnight rally.
At the close of open-outcry trading on Thursday, LME three-month copper was 0.5 per cent lower on the previous day's settlement price at $US7,580 a metric ton.
The base metals rose overnight after stronger-than-expected Chinese flash manufacturing purchasing managers index data and buoyant Asian equities caused short-covering, analysts said.
Standard Bank analyst Leon Westgate said the improved PMI reading was widely anticipated following the Chinese Lunar New Year holiday in February.
"However, just as the dip in some surveys early in the year did not imply a meaningful downshift in growth, any subsequent recovery now also seems unlikely to represent a future surge in activity," he said.
China is the largest global consumer of industrial metals and as a result its industrial data is eyed closely by the copper market for clues regarding the copper demand outlook.
Most prices were soon dragged back into the red by a weaker euro, which lowered the appeal of the US dollar-denominated base metals to buyers with Europe's common currency. Weaker European and US stocks also weighed upon sentiment and risk appetite.
The euro fell against the US dollar after the European Central Bank effectively set a deadline of Monday for a Cyprus bailout deal.
"[The market is] lacking the conviction to push higher given the ongoing uncertainty surrounding Cyprus and the still rather tepid and exploratory buying activity from China," said Westgate.
Growth in German business activity slowed in March as the manufacturing sector surprisingly contracted.
The composite purchasing managers' index fell to 51.0 from 53.3, Markit figures showed.
A reading above the 50 threshold indicates month-to-month growth, but activity in the manufacturing sector fell below that level, with a reading of 48.9.
The figures likely stoked concerns about the Germany's ability to continue shrugging off weakness in other euro-zone countries that have been more badly hit by the bloc's fiscal crisis.
The resurgence of concerns regarding the health of the euro-zone economy is likely to keep price gains in check, as Europe is the second-largest consumer of industrial metals.
Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Wednesday PM kerb
Copper 7580.0-7585.0 Dn 40
Lead 2172.0-2172.5 Dn 15
Zinc 1933.0-1934.0 Up 2
Aluminum 1928.0-1929.0 Dn 10.5
Nickel 16890.0-16895.0 Up 75
Tin 22590.0-22595.0 Up 40
Aluminum Alloy 1815.0-1825.0 Dn 5
Aluminum Alloy-NASAAC 1800.0-1810.0 Dn 25
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