LONDON: Copper prices rose in muted trade on Monday as traders and funds cut short positions betting on lower prices as the market awaited US inflation data that could indicate when the Federal Reserve might cut interest rates.
Benchmark copper on the London Metal Exchange (LME) traded up 0.3% at $8,190 a metric ton in official rings. Prices of the metal used widely in the power and construction industries hit three-month lows of $8,127 last week on concern over demand prospects in top consumer China.
“Short covering has supported copper this morning,” one copper trader said. “It’s quiet because of the Chinese holiday, people are still nervous about Chinese demand. What happens to the dollar this week will be very important in China’s absence.”
US consumer prices due this week could determine when US interest rates are cut. That, in turn, could weaken the dollar, making dollar-priced metals cheaper for holders of other currencies.
Overall, industrial metals are expected to remain under pressure from trouble in China’s property sector, which now seems to be rippling out into the rest of the world.
“Real estate fears, which first appeared and remain to the fore in China, are spreading to the US, where New York Community Bancorp has been hammered for its exposure to commercial property,” broker Marex said in a note.
Elsewhere, zinc fell to $2,278 a ton for its lowest since last August, hit by surpluses of the metal used to galvanise steel, a key material for the construction industry. Zinc stocks in LME-registered warehouses have climbed 25% since late December to 238,275 tons, their highest since August 2021.
Zinc was up 0.5% at $2,312 a ton. In other metals, aluminium slipped 0.1% to $2,214 a ton, lead gained 0.5% to $2,043, tin was up 1.6% at $26,800 and nickel firmed by 0.5% to $16,000.
Comments
Comments are closed for this article.