Metals hit multi-year lows on global growth concerns, dollar rises

24-Jul (Reuters) — Metal prices hit multi-year lows on Friday after weaker-than-expected data from China and the euro zone raised concerns about global growth, but the U.S. dollar rose as a Federal Reserve rate hike was still on the table.

London copper fell to its lowest level since 2009 after a survey showed China’s factory sector contracted by the most in 15 months in July due to shrinking orders, fuelling worries over demand in the top metals consumer as stockpiles steadily mount.

The flash Caixin/Markit China Manufacturing Purchasing Managers’ Index (PMI) dropped to 48.2, below economists’ estimate for a reading of 49.7. It was the fifth straight month below 50, the level which separates contraction from expansion.

Euro zone business activity also started the second half on a less secure footing than expected, hit by Greece’s near-bankruptcy woes. Markit’s flash PMI fell to 53.7 this month from June’s four-year high of 54.2. A Reuters poll had predicted a more modest dip to 54.0.

While economies looked weaker in Europe and Asia, better-than-expected U.S. jobless claims kept the Federal Reserve on track for a rate hike in coming months.

The U.S. dollar was 0.3 percent higher against a basket of currencies.

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