LONDON: Copper prices dipped below $9,000 per metric ton on Thursday for the first time since April on funds selling, but prices are likely to be supported by improved buying interest from China. Three-month copper on the London Metal Exchange traded 0.8% lower at $9,035 per metric ton during official rings.
It earlier dipped to $8,900 to its lowest since March 28, breaking support level at $8,981.99, the 200-day moving average. “Funds continued to sell after overshoot since May and they are still not stopping,” a trader said.
The most-traded September copper contract on the Shanghai Futures Exchange closed at 73,500 yuan a ton. It fell 15% from the all-time peak in May to fuel physical buying in China, which consumes half of the world’s copper.
More copper rod plants in Jiangsu increased production this week as orders flocked in after copper prices retreated, a copper buyer source said.
“Things are finally moving. Physical copper market is coming back to life after three months of standstill,” the source said. Copper premium, the amount a Chinese buyer agreed to pay on top of LME copper prices to import copper, surged to $25 a ton on Thursday, its highest in more than three months.
Premium, a gauge of physical demand, turned negative when LME prices hit a record high of $11,104.5, meaning copper suppliers had to pay their clients to sell their copper.
LME lead was down 0.6% at $2,032 a ton, zinc moved 1.2% lower to $2,275, tin slipped 1.7% to $29,290, nickel ticked 0.2% lower to $15,800, and aluminium shed 1.1% at $2,275.
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