LONDON: Copper prices bounced on Thursday from the lowest levels in five weeks as the dollar weakened and investors looked ahead to an expected revival in demand in top metals consumer China.
Three-month copper on the London Metal Exchange rose 1% to $8,947.50 a tonne by 1110 GMT after sinking 1% on Wednesday and touching the weakest since Jan. 10.
The dismantling of strict COVID-19 controls in China sent copper surging last month to a seven-month peak, while investors took heart on Thursday from data showing China’s new home prices rose in January for the first time in a year.
The property sector accounts for significant metals demand.
“There’s high-level data showing that things are beginning to stir in China, but when it comes to infrastructure and construction, it will take a bit more time,” said independent consultant Robin Bhar.
“There’s good dip buying around to support the underside. People are taking the opportunity to build longs, whether tactically as we go into Q2 or strategically because of the green energy transition.”
Also supporting metals was a weaker dollar index as investors scooped up higher-risk currencies, making commodities priced in the U.S. currency less expensive for buyers using other currencies.
The most-traded March copper contract on the Shanghai Futures Exchange fell 0.5% to 68,510 yuan ($9,989.36) a tonne.
“The demand is bad but the outlook is good. People are just hoping for a recovery in March,” said a metals trader, expecting prices to continue to trade sideways until March.
In other metals, LME aluminium dipped 0.1% to $2,383 a tonne, zinc shed 0.2% to $3,012.50, lead eased 0.2% to $2,048, while nickel was little changed at $26,140 and tin added 0.1% to $26,685.