LONDON: Copper prices held steady in London on Thursday against a backdrop of dollar strength and uncertain demand prospects in top metals consumer China.
Three-month copper on the London Metal Exchange (LME) was unchanged at $8,852 a metric ton by 1101 GMT.
“Consumption in the world’s biggest consumer of metal has disappointed following the end of the Lunar New Year holiday, when activity usually starts to pick up,” said ING commodities analyst Ewa Manthey.
Chinese manufacturing activity is likely to have contracted for a sixth straight month in March but at a slower pace, a Reuters poll showed on Thursday, suggesting factory owners are struggling for orders despite some green shoots in the economy.
The market reaction to Thursday’s proposal by China’s top copper smelters of a 5-10% production cut owing to tight supply of raw materials was muted because the plan had already been flagged and priced in, one trader said.
Copper touches two-week low, awaits clarity on smelter cuts
Metals trade in London hours was cautious ahead of the Easter weekend, which coincides with the end of the first quarter, another trader said. With public holidays on Friday and Monday, the LME market will not reopen until Tuesday.
“We have historically walked into prices on the Tuesday morning that were not reflective of the close on the Thursday night,” the second trader said.
The dollar index rose on Thursday, reflecting currency strength that makes dollar-priced commodities more expensive for buyers using other currencies.
The market was awaiting U.S. PCE inflation figures due on Friday, which could influence the Federal Reserve’s next move on interest rates. Lower key rates would support industrial, growth-dependent metals by reducing borrowing costs for manufacturers and the construction industry.
In other metals, LME aluminium rose 0.4% to $2,306 a ton, zinc lost 0.1% to $2,433, lead was up 0.2% at $2,005 while tin eased 0.1% to $27,490 and nickel added 0.9% to $16,765.
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