Copper prices held near $6,000 a tonne today, as bleak global factory growth data indicated a muddy outlook for metal consumption over what is typically the stronger quarter of the year for seasonal demand.

Manufacturing activity showed few signs of picking up across Europe, Asia or the Americas last month as demand stayed stubbornly weak, highlighting the need for central banks to continue supporting economic growth.

Three-month copper on the London Metal Exchange (LME) slipped 0.3 per cent to $6,008 a tonne by 0224 GMT, not far from a six-week low of $5,985 hit on Monday (June 1). Shanghai copper slid 0.6 per cent to 43,560 yuan ($7,029) a tonne.

“It has been a slow start to the year so far and the first half is typically a bit stronger than the second,” said analyst Dan Morgan of UBS in Sydney. But some short-term demand signals have started to turn positive, he added.

“Inventories have stopped lifting, cancelled warrants are at a healthy level, and credit policy in China has loosened, supply disruptions year to date have (also) been a tad ahead of what we have factored in.”  

LME copper stocks flattened out in mid-March, and began to trend down in mid-May, after rising strongly at the start of the year. MCUSTX-TOTAL

Copper prices could draw further support if mining conflicts in Peru, a top global minerals exporter, heat up ahead of presidential and congressional elections next year as political outsiders whip up anti-mining sentiment.

But given the absence of major supply disruptions in May, Barclays sees a surplus of 48,000 tonnes for 2015.

“We maintain our current view on copper and expect the market to deliver a modest surplus this year, with prices averaging $6,313 a tonne for the year, and $6,300 for Q2 15.”

In aluminium, the drop in premiums is close to reaching a bottom as a widening LME forward curve raises the profitability of holding physical aluminium, curbing distressed selling seen earlier in the year, JP Morgan said in a note.

The drop in premiums has also curbed profits for Chinese companies looking to export semi-manufactured metal, it said.

Still, Japanese premiums have the potential to drop another $50 before stabilising around $100, it said.

Two top aluminium producers have offered Japanese buyers a premium of $130 or $160 per tonne for July-September primary metal shipments, down 66 and 58 per cent respectively from the previous quarter. - Reuters