(Adds quotes, updates prices)
HANOI, April 1 (Reuters) – Copper prices fell on Thursday, hit by subdued factory activity growth in top consumer China last month, while a supply threat in Chile being averted after largest producer Codelco struck a labour deal.
Three-month copper on the London Metal Exchange fell 0.5% to $8,742 a tonne by 0608 GMT, while the most-traded May copper contract on the Shanghai Futures Exchange declined 0.3% to 65,430 yuan ($9,950.27) a tonne.
China’s factory activity in March expanded at the slowest pace in almost a year on softer overall domestic demand, with the Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) dropping to 50.6 last month, its lowest level since April 2020.
“The Chinese Caxin PMI numbers for March … confirms the slowdown in physical metals demand of late,” said Malcolm Freeman, a director at UK broker Kingdom Futures, in a note.
Yangshan copper premium SMM-CUYP-CN was hovering at its lowest since Dec. 23 at 58.50 a tonne, indicating weakening demand for imported copper into China. Stockpiles of the metal in exchange warehouses have been rising steadily. MCUSTX-TOTALCU-STX-TOTAL
Meanwhile, Chilean state copper giant Codelco clinched a deal with workers at its Radomiro Tomic mine after they accepted a new contract offer, defusing worries about a potential strike.
Freeman said copper prices were also weighed by the Codelco deal.
* LME zinc fell 0.2% to $2,813 a tonne, lead declined 0.6% to $1,962.50 a tonne, while aluminium rose 0.5% to $2,223.50 a tonne.
* ShFE lead dropped 1% to 15,205 yuan a tonne, zinc rose 0.2% at 21,675 yuan a tonne while aluminium rose 1.4% to 17,430 yuan a tonne.
* U.S. aluminium premium hit its highest since June 2019 at $416.30 a tonne, while premium in Europe reached $153.87 a tonne, a level unseen since May 2018.
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$1 = 6.5757 yuan Reporting by Mai Nguyen; Editing by Shailesh Kuber and Rashmi Aich
