London copper flat; set for fourth weekly gain on hopes of stimulus boost

SINGAPORE: London copper was unchanged on Friday amid a gloomy outlook for the global economy, but the metal was set for its fourth straight weekly gain fuelled by hopes of a demand boost from stimulus measures by central banks.

Three-month copper on the London Metal Exchange (LME) was flat at $5,764.50 a tonne at 0704 GMT, while the most-traded July copper contract on the Shanghai Futures Exchange closed down 0.8pc to 46,840 yuan ($6,614.60) a tonne, tracking London's overnight losses.

LME copper on Thursday had soared 36pc since March 19, when it hit a bottom this year, on solid demand from China and liquidity injections from global central banks, but ended 2.4pc lower on the same day as many viewed the rally is overdone.

Governments around the world have spent $10 trillion in fiscal actions but significant further efforts are needed, the head of the International Monetary Fund said.

"The market realised there's no Fed purchases, and it can't stand on its own feet yet," said a metals trader, referring to the US Federal Reserve's asset purchase that had dropped in early June compared March-May.

However, he said the current price level of around $5,750 a tonne is reasonable for now, as a weakening US dollar lent support.

FUNDAMENTALS

TECHNICALS: LME copper is facing a resistance level of $5,859.50 a tonne and a supportive level of $5,508.21 a tonne, Reuters commodities technical analyst Wang Tao said.

CODELCO: Unionized mine workers in top copper producer Chile warned that health should take precedence over output.

OTHER PRICES: LME aluminium fell 0.9pc to $1,587 a tonne and zinc declined 0.3pc to $2,002 a tonne. In Shanghai, nickel dropped 1.4pc to 101,740 yuan a tonne and lead fell 1.2pc to 14,145 yuan a tonne.