Copper dips as Lunar New Year halts Chinese buying

LONDON: Copper prices dipped on Friday as Chinese buyers who had helped to fuel a scorching rally were absent during their Lunar New Year holiday and wider financial markets awaited further US stimulus.

Benchmark copper was down 0.4% at $8,248.50 a tonne by 1140 GMT after touching an eight-year peak on Thursday, having surged nearly 90% since March last year.

"There was some last-minute restocking by the Chinese ahead of their holiday, so when they come back they'll be able to gear up pretty quickly," said independent consultant Robin Bhar.

In China, the world's biggest metals consumer, the Shanghai Futures Exchange is closed for the Lunar New Year and will reopen on Feb. 18.

A cocktail of supply constraints, inflation fears and rising demand for a low-carbon economy will continue to keep copper buoyant, Bhar added.

"Any dips you will want to buy. It does seem to be the start of something, whether it's a supercycle or an extended period of elevated price," he said

Global shares dipped as investors looked for more US stimulus spending and weighed some tepid economic data against increasing COVID-19 vaccinations.

Zinc, used in galvanising steel, rose as high as $2,824.50 a tonne on the LME - its loftiest since Jan. 8 - as it rode the tailwind of strong steel prices before paring gains to $2,807.50, up 0.7%.

A shortage of tin pushed up the premium of the LME cash price over the three-month contract to an intraday record of $3,000 a tonne on Wednesday and closed on Thursday at $1,850. That compares with a premium of $420 two weeks ago.

"We forecast the market to remain tight throughout the first quarter. Many traders and producers have sold out of metal for the period," International Tin Association market analyst James Willoughby said in a report.

LME aluminium rose 0.1% to $2,082 a tonne, nickel dropped 1.3% to $18,375, lead gained 1% to $2,122.50 and tin was up 0.3% at $23,375.