LONDON: Copper rose on Wednesday as funds closed positions betting on lower prices, but a higher dollar, lower imports of the metal by top consumer China and rising inventories were expected to weigh.
Benchmark copper on the London metal Exchange was up 0.3 percent at $5,789 a tonne at 1059 GMT. That compares with a one-month low of $5,759 a tonne hit on Tuesday.
Traders said funds were cutting short positions after copper failed to break below $5,755, the low from Feb. 2, on Tuesday.
Growing expectations the US Federal Reserve will hike rates next week have boosted the US currency, which when it rises makes dollar-denominated metals more expensive for holders of other currencies, which could mean weaker demand.
"The Fed appears determined to raise rates next week," said
Quantitative Commodity Research analyst Peter Fertig. "But it may still depend on data, particularly the non-farm payrolls."
The US monthly jobs report due on Friday includes non-farm payrolls, which are expected to rise by 190,000 in February. They come before the Fed meets on March 14-15.
Copper imports to China -- accounting for nearly half of global consumption estimated at around 23 million tonnes this year -- totalled 340,000 tonnes in Feb, down 10.5 percent from January and down 19 percent from a year ago.
"China remains key and we project moderate demand growth this year, mainly from the power sector," Julius Baer analyst Carsten Menke said in a note. "
Stocks of copper in LME approved warehouses at 288,525 tonnes have nearly doubled since last Thursday. Most of the deliveries were to warehouses in Asia, which traders say suggest the metal came from China.
However, mine disruptions in Chile, Peru and Indonesia are supporting prices.
One disruption is a strike at the Escondida copper mine, the world's largest, in Chile.
"After 25 days (of strikes) we can expect lower production already by some 95,000 to 100,000 tonnes, which naturally will go on rising while the strike is prolonged," Chile's Mining Minister Aurora Williams said.
Aluminium rose 0.3 percent to $1,881, zinc gained 0.3 percent to $2,702, lead added 0.2 percent to $2,238, tin fell 0.1 percent to $19,365 and nickel slid 0.7 percent to $10,570.
Comments
Comments are closed for this article.