LONDON: Copper prices rose in volatile trade on Monday, supported by a weaker dollar and signs of improving demand from top consumer China.
Benchmark copper on the London Metal Exchange (LME) was up 1.3% at $8,693.5 a tonne by 1703 GMT, having fallen by 3.2% last week.
US banking stocks rose on Monday and Europe’s lenders recovered from a sharp early sell-off after UBS Group’s state-backed takeover of Credit Suisse appeared to close off one source of worry for the global banking sector.
“The market is trying to absorb what it all means for the metals sector,” said WisdomTree commodity strategist Nitesh Shah.
“Metals markets are very sensitive to macroeconomic trends, and everything that happened in the banking sector could cause a slowdown in economic activity.” Major central banks moved on Sunday to bolster the flow of cash around the world, while traders and economists remain split on whether the Federal Reserve will raise its benchmark overnight interest rate on Wednesday. Oil prices hit their lowest levels since 2021.
The US dollar index, which measures the currency against six major peers, was last down about 0.4%. A weaker dollar makes copper and other metals more attractive to buyers holding other currencies.
Trafigura’s co-head of metals trade said on Monday the copper price could hit a new record high within the next 12 months due to tight stocks.
In China, the world’s largest consumer of the metal widely used in electrical wiring and construction, the Yangshan copper premium
rose to its highest since December, indicating improving appetite for imported copper.
LME aluminium was up 0.3% at $2,280 a tonne, while zinc fell by 0.2% to $2,889 a tonne, nickel lost 2.5% to $22,780, lead was up 1.1% at $2,112 and tin gained 1.5% to $22,850.
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