LONDON: Copper prices in London were on track to end a run of three weekly declines on Friday, boosted by a potential demand uplift from support for China’s yuan currency and seasonal strength in consumption.
Three-month copper on the London Metal Exchange (LME) was up 1% at $8,439 per metric ton by 1026 GMT.
The metal used widely in the power and construction sectors is up 2.4% this week, with gains partly fuelled by short-covering by computer-driven funds. Traders and investors are now shifting their focus to September and October, traditionally strong consumption months for copper in China.
However, longer-term prospects for the metal, down 4.5% so far this month, are still fragile in the face of weak economic data from China.
London copper retreats on disquiet about global growth, rates
“Even if China were to step up incremental policy support meaningfully, it takes time to reinvigorate the real economy and for impacts to show up in the data,” Citi said, adding that it remains cautious on prospects for industrial metals over the next 6-9 months.
A strong U.S. currency, which makes dollar-priced commodities less attractive for buyers holding other currencies, also added pressure on copper prices.
The dollar index, which measures the U.S. currency against six others, touched its highest since June 7 ahead of a speech by the head of the U.S. Federal Reserve later in the day.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose by 3.5% this week while zinc inventories fell by 20.2% to a seven-month low, weekly data showed.
LME aluminium prices rose 0.8% to $2,174 a ton, zinc firmed by 0.3% to $2,400, lead was down 0.6% at $2,170 and tin lost 1% to $25,605 while nickel gained 0.3% to $20,890.
Comments
Comments are closed for this article.