Expect base metals prices to trade negative: Sushil Finance

     Sushil Finance's report on Base Metals

Base Metals

Copper prices hit six-year lows on Monday as manufacturing data from top consumer China and a slide in Shanghai equities reinforced concerns about the country's economic growth prospects.

July manufacturing activity in China fell at its fastest pace in two years, dashing hopes the economy may be stabilising. The final Caixin/Markit China PMI dropped to 47.8 in July from June's 49.4.

The data also reinforced negative sentiment on Chinese equity markets, where the Shanghai Composite Index lost 1 percent. Traders also cited concern about the ripple effect of slowing activity in China on other Asian economies.

Strikes, power problems, lower ore grades, floods and drought, which have tightened copper supplies, are unlikely to come into play unless they lead to a significant deficit, traders say.Aluminium is under pressure from a globally oversupplied market due to Chinese exports.

Outlook

We expect base metal prices to trade negative on the back of worries about slowing growth in China.

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