LONDON: Copper prices rose on Monday, supported by a weaker dollar and hopes for stronger demand in China on the back of promised economic stimulus from the government.
The Chinese government said it would step up measures to stabilise its economy and the central bank is expected to ease monetary policy before long.
But for now, demand remains weak and the country is gripped by a rise in COVID-19 infections that some fear could kill more than 1.5 million in coming months.
“The market is trying to gauge how to assess China, whether to focus on the recovery or on short-term troubles,” said Saxo Bank analyst Ole Hansen.
“It seems the market is buying into the long-term story. Selling appetite is limited.” Benchmark copper on the London Metal Exchange (LME) was up 0.7% at $8,320 a tonne in official open-outcry trading. The dollar eased, making dollar-priced metals cheaper for buyers with other currencies.
Copper fell as low as $6,955 in July as the global economy weakened and China’s zero-COVID policy shuttered factories. Hopes for looser Chinese restrictions and broader economic recovery next year have lifted prices since November.
But industrial activity is contracting in developed markets and China, said analysts at ANZ bank.
A World Economics survey showed China’s business confidence had fallen to its lowest since January 2013.
Yangshan copper import premiums fell to $52.50 a tonne from about $145 in early November, indicating lower demand for overseas metal.
Metals prices derived some support from fears of low inventories and supply after Panama on Friday ordered operations to halt at a copper mine owned by Canada-based First Quantum Minerals.
In other metals, LME aluminium was down 0.2% at $2,371.50 a tonne, zinc dipped 0.2% to $3,013.50, nickel fell 3.6% to $27,250, lead rose 0.3% to $2,158.50 and tin was up 0.1% at $23,550.
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