Copper prices edged higher to hit a one-week high on Tuesday following a three-day weekend in London, though trading was thin as the Shanghai Futures Exchange remained shut for a national holiday.
While top metals consumer China’s financial markets will remain closed until Wednesday, the focus is on whether the US Federal Reserve will indicate that it expects a pause in interest rate increases, after a widely expected hike of 25 basis points to be delivered this week.
Three-month copper on the London Metal Exchange was up 0.7% at $8,655 a tonne, as of 0215 GMT, having reached $8,714 earlier in the session, its strongest since April 25.
Copper suffered a 4.4% slump in April, its biggest monthly loss since June, pressured by the sluggish pace of metals demand recovery in China despite shedding strict COVID-19 restrictions.
China’s manufacturing activity unexpectedly shrank in April, official data showed on Sunday, raising pressure on policymakers seeking to boost an economy struggling for a post-COVID lift-off amid subdued global demand and persistent property weakness.
“We believe that the government will resume subsidies on electric vehicles, which would benefit both the manufacturing and services sector.
The government might also push infrastructure construction faster,“ ING economists said in a note. Support from the supply side may, however, wane in coming months.
Copper nudges higher but remains set for monthly loss
“Copper and nickel inventories at exchanges remain low. However, key copper producers have flagged significant inventory build at mine is set to flow to market, while new nickel refining capacity is scheduled to come online throughout 2023 to 2025, supporting an easing in market conditions,” National Australia Bank said in a quarterly report on Monday.
In other metals, aluminium climbed 0.6% to $2,370.50 a tonne, zinc climbed 0.4% to $2,658, lead gained 0.2% to $2,153, tin rose 0.4% to $26,200, while nickel was virtually flat at $24,210.
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