Copper prices retreated across major exchanges on Thursday, after climbing a five-month high in the previous session, as demand worries overshadowed supply constraints from declining Chinese output.

Three-month copper on the London Metal Exchange fell 0.61% to $9,915 per metric ton by 0710 GMT, while the most-traded copper contract on the Shanghai Futures Exchange dipped 0.51% to 79,770 yuan ($11,152.12) a ton.

China’s manufacturing activity shrank for a fifth straight month in August, suggesting sluggish domestic demand.

Marginal weakness in terminal demand may reflect a lackluster peak season, though the widespread shutdown of scrap copper rod mills lend strength to copper prices, said broker Galaxy Futures.

Top producer China’s refined copper production this month is set for a rare fall, the first for the period since 2016 as newly introduced tax regulations constrain the supply of scrap copper.

The dollar steadied on weighing data that showed a weakening labour market, which reinforced expectations of interest rate cuts this month.

The dollar index, which measures the currency against six major peers, held firm at 98.227 after easing 0.17% on Wednesday.

Meanwhile, higher copper stocks (MCUSTX-TOTAL) in LME-registered warehouses suggest weaker demand outside China, standing at 158,575 tons, up 75% since late June.

Elsewhere, Canadian miner Teck Resources has deferred approval of major growth projects until its flagship Quebrada Blanca copper mine in Chile reaches stable operations and achieves its target output, following a miss in production guidance.

Among other London metals, aluminium lost 0.95%, nickel dipped 0.84%, lead fell 0.2%, tin eased 0.76%, and zinc edged down 0.45%.

SHFE aluminium lost 0.77%, nickel dipped 0.53%, lead fell 0.06%, tin eased 0.4%, and zinc declined 0.83%.
Source: Reuters