Benchmark London copper edged up in early Asian trade on Tuesday, supported by a softer dollar but concerns about China’s lacklustre demand and caution ahead of next week’s US Federal Reserve meeting kept traders cautious.
Three-month copper on the London Metal Exchange was up 0.2% at $8,746.50 a tonne by 0351 GMT, after hitting a more than two-week low of $8,726.50 on Monday.
On the Shanghai Futures Exchange, however, the most-traded June copper contract fell 0.4% to 68,150 yuan ($9,875.24) a tonne.
The US dollar index dropped 0.4% overnight and hit a ten-day low of 101.19 in early Asian trade, making greenback-priced metals cheaper for holders of other currencies.
Investors are awaiting a mix of US economic data later this week, which could provide more clues on the Fed’s next policy move.
Both the Dallas Fed’s business activity index and manufacturing output index for April in the US fell short of expectations, adding to the concerns about a slowdown in the world’s biggest economy.
Weak demand in top metals consumer China and rising concerns that the US Treasury Department could hit its debt limit in the coming months were also seen keeping a lid on metals prices.
London copper inches higher on low inventories
LME aluminium dropped 0.3% to $2,375 a tonne, nickel shed 1.1% to $24,305 a tonne, lead fell 0.2% to $2,138.50 a tonne and tin lost 0.8% to $26,430 a tonne, while zinc rose 0.4% to $2,681.50 a tonne.
On the Shanghai exchange, aluminium declined 0.4% to 18,830 yuan a tonne, zinc dropped 1% to 21,500 yuan a tonne, lead slipped 0.1% to 15,295 yuan a tonne and tin shed 0.3% to 212,590 yuan a tonne, while nickel rose 0.2% to 183,200 yuan a tonne.
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