LONDON: Copper prices rose for a fourth straight session on Wednesday, buoyed by signs of firmer demand in China, buying by computer-driven funds and hopes of interest rate cuts that weighed on the dollar. Three-month copper on the London Metal Exchange rose 1% to $9,768 a metric ton in official open-outcry trading, having rebounded this week after touching its lowest in more than two months last Thursday. LME copper has shed 12% since hitting a record high of $11,104.50 on May 20 in a rally driven by speculators and funds.
“Demand has picked up in China. It’s not roaring away, but has definitely picked up compared to where it was a couple of weeks ago,” said Dan Smith, head of research at Amalgamated Metal Trading. Utilisation rates at copper rod fabrication plants in China have increased to 59% from 48% at the end of May, he added.
The most traded August copper contract on the Shanghai Futures Exchange gained 1.2% to 79,630 yuan ($10,947.96) a ton. “The gains in copper are also due to the algos coming in to buy the dip and chase it higher,” Smith said, referring to algorithmic computer models that place buy and sell orders on momentum signals.
Also supporting the market was a softer dollar after dovish comments from Federal Reserve Chair Jerome Powell sent US bond yields lower, overshadowing a strong US jobs report.
Capping gains, however, was data showing China’s services activity expanded at the slowest pace in eight months and confidence hit a four-year low in June, dragged down by slower growth in new orders. In other LME metals, aluminium rose 0.5% in official activity to $2,536 a ton, zinc advanced 1.8% to $2,975, lead was up 0.3% at $2,209.50, nickel jumped 2.1% to $17,355 and tin gained 1% to $33,250.
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