Copper edges lower on China demand concerns
- Three-month copper on the London Metal Exchange slipped 0.2% to $10,201 a tonne.
- Torlizzi expected copper prices to correct lower during the summer, when bullish investors would start buying again. He targeted $8,000 as an attractive level to re-enter the market.
LONDON: Copper prices dipped on Friday as investors worried about demand from China and its authorities' action to curb commodity prices, but losses were capped by the prospect of US spending.
Three-month copper on the London Metal Exchange slipped 0.2% to $10,201 a tonne by 1355 GMT, having surged by 31% so far this year and touched a record peak of $10,747.50 on May 10.
"It's very confusing for the market because we have mixed messages. Investors are not chasing prices higher at current levels," said Gianclaudio Torlizzi, partner at consultancy T-Commodity in Milan.
"On one hand, we have downside pressure on the market from China, but on the other hand, there's a fixation by the market that the new Biden spending plan will be very big."
Torlizzi expected copper prices to correct lower during the summer, when bullish investors would start buying again. He targeted $8,000 as an attractive level to re-enter the market.
Stock markets gunned for record highs on Friday ahead of the White House presenting President Joe Biden's budget for trillions of dollars in spending on infrastructure, education and other initiatives.
Copper is often considered a bellwether of the global economy due to its wide industrial uses, including in infrastructure projects.
The Yangshan copper premium dropped to $35.50 a tonne, its lowest since February 2016, indicating weakening demand for imported metal into China.
Democratic Republic of Congo has authorised exports of copper and cobalt concentrate for mining companies that hold waivers, customs documents showed.
Bottlenecks at LME registered warehouses in Malaysia owned by metals storage firm ISTIM UK are adding to the difficulties aluminium consumers in the United States and Europe face in getting the metal they need.
LME tin hit its highest since May 2011, climbing as high as $30,960 a tonne, after earthquakes following a volcanic eruption in Congo disrupted exports of tin concentrate. It later pared gains to $30,775, up 2.9%.
LME aluminium fell 1.3% to $2,449.50 a tonne, zinc shed 0.4% to $3,049, lead rose 0.2% to $2,207 and nickel gained 0.4% to $17,970.
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