METALS-Copper dips on China factory data but hopes for recovery underpin prices – Reuters

* GRAPHIC-2020 asset returns: (Adds official trades)

By Zandi Shabalala

LONDON, April 30 (Reuters) – Copper eased on Thursday as a private sector survey showed factory activity in top consumer China unexpectedly shrank, but hopes for higher metals demand as the world’s second largest economy reboots curbed price falls.

Lingering fears for a long recovery ahead for China pulled benchmark copper on the London Metal Exchange (LME) down 1.3% to $5,196 per tonne by 1611 GMT.

Prices touched their highest in over six weeks in early trade, helped by a reading of China’s official factory activity showing faster expansion in April.

However, that was offset by the closely watched Caixin survey which showed factory activity shrank last month as the coronavirus pandemic shattered global demand, sparking a substantial drop in export orders and more layoffs.

China accounts for nearly half of global copper consumption estimated at 24 million tonnes.

ING analyst Wenyu Yao said China’s recovery, although slow, had fuelled the recent rally in copper prices and that supply cuts were also underpinning the market.

OUTPUT CUTS: Supporting prices were expectations for lower output as miner Glencore cut its production forecast for the year for copper by 3% to 1.25 million tonnes and for zinc by 8% to 1.16 million tonnes.

Mining giants including Anglo American and Rio Tinto have also cut their 2020 output expectations as government restrictions hobble operations.

CHILE COPPER: Chile, the world´s top copper producer, boosted its output of the red