LONDON: Copper prices in London rose on Wednesday due to support from lower inventories and despite continuing concerns about global economic growth and a stronger dollar.
Three-month copper on the London Metal Exchange (LME) rose 0.5% to $8,790 a tonne by 1606 GMT, after earlier hitting $8,665, its lowest in two weeks.
“The latest manufacturing data in the US and China is fuelling concerns of weaker economic growth. Impact of higher oil prices is also weighing on the market sentiment, though fundamentals have not changed much as inventories are still drawing down,” said Soni Kumari, commodity strategist at ANZ Research.
US manufacturing activity slumped to the lowest level in nearly three-years in March, and China’s manufacturing sector lost momentum in the same month.
“We see metals remaining sensitive to disappointing macro developments in the short-term, but increasing supply disruptions and lower inventories should continue to protect the downside,” Kumari added.
Global copper smelting activity fell in March, and Chile’s total copper production dropped 3.4% in February.
Copper stocks in LME registered warehouses, which are at 65,250 tonnes, have dropped almost 15% over the past two weeks.
Cancelled warrants - metal earmarked for delivery — at around 47% of the total suggest more metal is due to leave the LME system, leaving on warrant stocks at 34,350 tonnes, the lowest since late 2021.
Making metals costlier for buyers with non-dollar currencies, the dollar index recovered from two-month lows hit in the previous session.
LME zinc prices were 1.0% lower at $2,802 a tonne after hitting $2,775, their lowest level in five months, while aluminium fell 1.2% to $2,343.
According to Goldman Sachs, the aluminium market has shifted into a deficit state, and prices for the metal could rise over the year.
Tin fell by 3.0% to $24,250, nickel was down by 1.9% to $22,675 and lead lost 0.3% to $2,111.
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