LONDON: Copper prices rose in London on Wednesday, helped by easing concerns about the banking sector, before further growth was capped by the stronger dollar.
Metals prices bounced back in recent days as stronger risk-on sentiment, with banking sector woes subsiding, improved market confidence.
“The sector wants to move higher” supported by the positive mood in the stock market, said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. “Copper is increasingly showing signs of breaking to the upside, supported by falling stocks and a general favourable outlook.” Benchmark copper on the London Metal Exchange (LME) was up 0.2% at $8,992.5 a tonne by 1557 GMT.
Global shares rose on Wednesday. The rise in metals prices was limited by a stronger dollar, which makes dollar-priced metals costlier for buyers with other currencies. The dollar rose against major peers on Wednesday, pausing its recent declines.
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, said analyst Sudakshina Unnikrishnan at Standard Chartered Bank.
“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.
LME aluminium fell 0.3% to $2,382.5 a tonne after hitting $2,423, its highest since March 2. Zinc added 0.8% at $2,959.5 after hitting $2,999, its maximum level since March 7.
Lead flat at $2,133.5 after touching $2,154, its highest in five weeks. Tin rose 0.3% to $25,845 after touching $26,050, its highest since March 1. Nickel declined 1.4% to $23,750, after hitting $24,426, its fresh high since March 7.
The nickel cash contract discount to three-month futures on the LME reached $172 a tonne, the weakest contango since early January and compared to $333 a week ago, indicating concern about short-term supply.
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