May 11, 2012 NEW YORK (Dow Jones)--Copper prices pared their losses Friday on upbeat U.S. economic data, but futures still settled at their lowest level in more than two weeks on renewed concerns about China's economic slowdown and ongoing worries about Europe.
The most actively traded contract, for July delivery, settled 4.25 cents, or 1.2%, lower at $3.6480 a pound on the Comex division of the New York Mercantile Exchange. This was the lowest settlement price since April 23, and down nearly 2% on the week.
U.S. consumer sentiment improved in early May, according to a Thomson Reuters/University of Michigan index, bucking forecasts of a decline.
Meanwhile, the U.S. producer price index fell 0.2% in April. Core PPI, which excludes food and energy, met expectations with a 0.2% rise.
Copper futures inched up off session lows on the upbeat data, but prices remained in negative territory throughout the trading day.
"Persistent worries over the political and economic problems in Europe together with the soft demand picture in China continue to dampen sentiment," traders at Sucden Financial said in a note.
Earlier, copper futures took a negative turn after Chinese industrial production data for April missed expectations. Value-added industrial production increased 9.3% in April from a year earlier, but slowed sharply from a 11.9% on-year increase in March. This was the slowest growth since May 2009, and missed forecasts of a 12.2% gain.
China is the world's largest consumer of copper, at about 40% of global copper consumption, and traders have long worried that slowing economic activity there will damp demand for the industrial metal.
"The April data reflects an ongoing adjustment of the economy to more balanced growth, and does not preclude a significant pick-up ahead, which we believe is key to achieving full-year targets outlined in March," Wiktor Bielski, global head of commodities research at VTB Capital, said in a report.
Investor worries about Europe's debt problems remain on the boil, however. The European Commission said Friday signs of recovery are appearing in the 27-nation European Union but the sovereign debt crisis and rising oil prices remain a threat. The EC's six-month forecast projected gross domestic product for the EU to remain unchanged in 2012, but rising by 1.3% in 2013. The 17-nation euro-zone's GDP is forecast to contract 0.3% this year, then expand 1.0% in 2013.
Copper is widely used in everyday goods like phones, refrigerators and laptops, and slowing economic growth can dent demand for the industrial metal.
Copper settlements (ranges include electronic and pit trading):
May $3.6485; down 4.30 cents; Range $3.6300-$3.6810
Mar $3.6480; down 4.25 cents; Range $3.6165-$3.6835