LONDON: Copper prices crept lower on Tuesday, pressured by a firmer dollar amid uncertainty over a potential global recession and demand in top metals consumer China.
Three-month copper on the London Metal Exchange (LME) slipped 0.5% to $9,310 a tonne by 1020 GMT, having surged 13% since Jan. 5.
“You could argue that it would be a good time to see some profit-taking,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“But the fact that it’s not emerging means the market is keen on holding onto the longs and waiting for the next move, which will have to be confirmed by an actual pick-up in demand from China.”
Volumes were lower than usual because Chinese markets were closed for the Lunar New Year holiday.
Physical volumes have been weak in China, but investors are betting that the recent lifting of COVID-19 controls will boost activity and demand in coming months.
Investors were awaiting U.S. economic data for further direction on the Federal Reserve’s interest rate trajectory, with U.S. flash PMI data due on Tuesday.
Copper drifts lower as China kicks off Lunar New Year holidays
“It will be watched very carefully, given the confusing signals we’re getting from recent U.S. data, where sentiment is weak and job reports are strong,” Saxo Bank’s Hansen said.
The dollar index was slightly firmer, indicating U.S. currency strength that makes dollar-priced commodities more expensive for buyers using other currencies.
In other metals, aluminium was little changed at $2,636 a tonne, zinc shed 0.5% to $3,405 and tin dipped by 0.2% to $29,435 while lead added 0.4% to $2,062.50 and nickel rose 1.2% to $28,435.
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