World Economy

Metals Sink on China, Europe Concerns

Metals Sink on China, Europe ConcernsMetals Sink on China, Europe Concerns

Metal prices hit multi-year lows on Friday as weaker-than-expected data from China and the eurozone raised concerns about global growth, but the US dollar rose on the prospects of a Federal Reserve interest rate hike.

Copper fell to its lowest level since 2009 after a survey showed Chinese manufacturing contracted by the most in 15 months in July as orders shrank. Worries grew over demand in the world's biggest metals consumer with stockpiles mounting up, Reuters reported.

The flash Caixin/Markit China Manufacturing Purchasing Managers' Index contracted for the fifth straight month. Eurozone business activity also started the second half on a less secure footing than expected, hit by Greece's near-bankruptcy.

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 US jobless claims kept the Federal Reserve on track for a rate increase in coming months.

"Commodities are shouting that the global economy is deteriorating, key emerging markets are already seeing major volatility and yet the world's most important central bank is close to tightening monetary policy," Michael Every, head of financial market research for Asia at Rabobank.