LONDON: Copper prices rose in London on Wednesday, helped by a weaker U.S. dollar and easing concerns about the banking sector, while the broader base metals market continued to look for further evidence of China’s demand recovering.
Metals prices bounced back in recent days as stronger risk-on sentiment with the banking sector woes subsiding improved market confidence.
Benchmark copper on the London Metal Exchange (LME) was up 0.5% at $9,023.5 a tonne by 1028 GMT.
Copper rose “after the dollar gave up earlier gains, especially against the yen as the general level of risk appetite improves,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
The U.S. currency’s weakening makes dollar-priced metals cheaper for buyers with other currencies.
Copper edges higher as banking fears ease
Demand from China, the world’s largest copper consumer, is expected to start recovering in the second quarter of 2023, and this should support prices, analyst Sudakshina Unnikrishnan at Standard Chartered Bank said.
“But the evolution of the macro landscape, the dollar moves and risk appetite will be key in driving price moves and setting sentiment,” Unnikrishnan added.
China’s factory activity probably grew at a slower pace in March, a Reuters poll showed on Wednesday, suggesting the economic recovery is uneven in the light of weak global demand and a property slump.
LME three-month nickel prices fell by 0.7% to $23,900 after hitting a three-week high on short-covering and low stocks in the previous session.
The nickel cash contract discount to three-month futures on the LME <CMNI0-3> reached $172 a tonne, the weakest contango since early January and compared to $333 a week ago, indicating concern about short-term supply.
LME aluminium rose 0.1% to $2,391 a tonne, zinc added 0.8% to $2,961, tin was up 0.2% at $25,820 and lead was unchanged at $2,135.
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