Copper slips on uncertainty in global economy

Copper fell Tuesday on concerns about demand growth after data showed weaker manufacturing activity in top consumers China and the United States, but supply worries due to a strike at the world's biggest copper mine limited losses. Benchmark copper on the London Metal Exchange slipped 0.1 per cent to $9,673 (Dh35,528) a tonne by 0944 GMT, extending falls from the previous session when it closed 1.8 per cent lower at $9.649.50 a tonne. The metal used in power and construction dipped to a low of $9.636.25 in intra-day trade, hovering near a one-week low at $9,625 hit on Monday. Data on Monday showed US manufacturing grew at its slowest pace in two years in July, while China's factories struggled with their weakest activity in 28 months in July. The Global Manufacturing Purchasing Managers Index slumped to its lowest level since July 2009, prompting concerns about demand for base metals. Article continues below "We're in an environment where macro-economic data is still having a big impact on [commodity] prices because of the huge amount of uncertainty as to which direction the global economy is taking. The data so far doesn't appear to suggest we're in a mode of recovery at the moment," said Gayle Berry, analyst at Barclays Capital. China is the world's largest consumer of copper, accounting for nearly 40 per cent of global demand, estimated this year at about 20 million tonnes. The US accounts for about 15 per cent of global demand. Further falls in copper were limited by worries about supply as a strike at the Escondida mine in Chile, which produces seven per cent of the world's copper, enters its 12th day. Workers at the mine have lowered their bonus demand, raising expectations that a solution could soon be reached. Also helping to support are stocks of copper in LME approved warehouses, which at 465,625 tonnes are down more than 8,000 tonnes since July 20. Mick Davis, chief executive at Swiss-based Xstrata, said China was expected to soon return to the international copper market as the country's stock overhang in has gone.