LONDON, Aug 15 (Reuters) - Industrial metal prices fell on
Monday as concerns about demand in China surfaced due to weak
economic data and a firmer dollar, but interest rate cuts by the
country's central bank provided some support.
Benchmark copper on the London Metal Exchange was
down 1% at $8,010 a tonne at 1607 GMT, down from the six-week
high of $8,214 hit on Friday.
"Chinese data was disappointing, suggesting a bigger hit
than expected from COVID restrictions," a metals trader said,
adding that a higher dollar had also triggered fund selling.
"But there is a positive - interest rate cuts from the PBOC
(People's Bank of China)."
China's economy unexpectedly slowed in July, with growth in
industrial output, fixed-asset investment, total social
financing and new yuan loans slowing.
Chinese property developers sharply cut investment in July,
and new construction starts suffered their biggest fall in
nearly a decade.
However, China's central bank on Monday unexpectedly cut
interest rates for the second time this year in an attempt to
revive credit demand to support growth.
"Fundamentals have reasserted themselves, reminding markets
that they are still a force to be reckoned with," said Edward
Meir, analyst at ED&F Man Capital Markets.
A rising U.S. currency, which makes dollar-priced metals
more expensive for operators in other currencies, weighed, while
worries about manufacturing due to concern about microchip
supply from major producer Taiwan added to negative sentiment.
"Just remember, from your humble toaster all the way up to
your car, there are microchips at work," said Kingdom Futures
CEO Malcolm Freeman.
A visit to Taiwan by U.S. House of Representatives Speaker
Nancy Pelosi earlier this month created tensions between China
and the United States.
Part of China's response involved its military surrounding
the self-ruled island in what Taiwan said amounted to a practice
Aluminium prices were also under pressure from record high
Chinese production in July as smelters ramped up after power
restrictions were eased.
Aluminium prices fell 1.2% to $2,405 a tonne, zinc
slipped 0.2% to $3,582, lead was down 0.5% at
$2,173, tin dropped 2% to $24,680 and nickel
lost 4.4% to $22,030.
(Reporting by Pratima Desai; editing by Jan Harvey, Jason Neely
and Barbara Lewis)