China manufacturing data supports copper prices

LONDON: Copper prices held largely steady on Monday as expectations for robust demand boosted by healthy manufacturing data from top consumer China was offset by a firmer dollar and as the market focused on the US presidential election.

Benchmark copper on the London Metal Exchange was up 0.2% at $6,729 a tonne at 1110 GMT. Prices of the metal used in the power and construction industries are down about 4% since hitting a 28-month high above $7,000 last week.

"China dominates copper demand, economic activity is back to normal so more stimulus is unlikely. It would be difficult to justify higher prices," said Julius Baer analyst Carsten Menke.

"The US election depending on who wins could be positive for sentiment. But it consumes less than 10% of the global total, it wouldn't move the needle in terms of demand from infrastructure investment."

MANUFACTURING: Activity in China's factory sector accelerated at the fastest pace in nearly a decade in October as domestic demand surged, adding momentum to an economy that is quickly recovering from the coronavirus crisis.

DOLLAR: A higher US currency makes dollar-denominated metals more expensive for holders of other currencies, which could subdue demand and prices.

ELECTION: President Donald Trump is trailing rival Joe Biden in national opinion polls ahead of Tuesday's election.

But the race is seen as close in enough swing states that Trump could still piece together the 270 votes needed to prevail in the state-by-state Electoral College that determines the winner.

VIRUS: Industrial Metals are also under pressure from new rounds of coronavirus-driven lockdowns globally which threaten global economic recovery and demand.

ALUMINIUM: Worries about nearby supplies on the LME market have narrowed the discount for the cash over the three-month contract to its lowest since December 2019.

Behind this concern is a large holding of aluminium warrants and a 30-39% long futures position for November settlement.

Three-month aluminium was down 0.6% at $1,836.

OTHER METALS: Zinc gained 0.4% to $2,534, lead slid 1.7% to $1,789, tin was down 0.3% to $17,665 and nickel ceded 0.3% to $15,115.