Copper slips on weak European factory data

 Copper prices edged lower on Wednesday, continuing a gradual slide from two-year highs reached last month as lacklustre European factory data reinforced concerns that demand will remain weak and the market oversupplied.

Benchmark copper on the London Metal Exchange (LME) was down 0.1% at $6,382 a tonne at 1048 GMT.

Prices crashed to $4,371 in March as the coronavirus closed factories worldwide but rebounded to $6,633 on July 13 as consumption in China, the biggest market, revived and traders worried the virus would disrupt mine production.

But with much of the world moving into recession and mine output holding up, some analysts think prices are too high.

"Copper is way ahead of the fundamentals," said Eugen Weinberg, head of commodities research at Commerzbank, adding that weak demand and oversupply should push prices down 10-15% from current levels.

EURO FACTORIES: Euro zone industrial production rose in June but less than expected.

BRITAIN: Britain's economy shrank by a record 20.4% in the second quarter.

U.S.: The White House and Congress are deadlocked on a coronavirus relief plan to support economic growth.

CHINA: Chinese copper demand has been strong, with imports rising to record levels. Data on Tuesday showed new bank lending fell more than expected in July.

SPREAD: Cash copper flipped to a small discount against the three-month contract on the LME for the first time in a month, pointing to an increase in nearby supply.

STOCKS: Stocks in LME-registered warehouses at 114,575 tonnes are the lowest in more than a year.

OTHER METALS: LME aluminium was up 0.1% at $1,788.50 a tonne, zinc fell 0.8% to $2,390, nickel slipped 1.3% to $14,165, lead was flat at $1,960.50 and tin was up 0.1% at $17,710.