LONDON: Copper prices reversed an earlier fall to touch a five-week high in London on Thursday on a weaker dollar and hopes that top consumer China would do more to support its economy after disappointing May output data.
Benchmark copper on the London Metal Exchange (LME) was 0.7% higher at $8,570 a metric ton by 1629 GMT, after hitting $8,577, its highest since May 10 and breaking above the 50-day moving average of $8,496.
Expectations of upcoming economic stimulus measures from China have been supporting copper, used in construction and power, and other metals this week.
China’s economy stumbled in May with industrial output and retail sales growth missing forecasts, data showed on Thursday.
“Chinese recovery has lost steam as indicated by the latest disappointing data releases,” said ING analyst Ewa Manthey.
Making dollar-priced metals more attractive for buyers holding other currencies, the US dollar fell after US retail sales unexpectedly rose in May. Some support for copper prices came from stocks in LME-registered warehouses, which registered a daily fall of 4,725 metric tons to a one-month low of 79,525 metric tons.
Large cancellation of warrants - documents that confer ownership - earlier this month, indicates large amounts of copper are due to leave the LME system soon.
Concern about copper supplies on the LME market are behind the shift to a premium for cash copper over the three-month contract, for the first time in two months, from a discount.
LME aluminium eased 0.1% to $2,251.5 per metric tonne, zinc lost 0.6% to $2,472, lead rose 0.5% to $2,128, while nickel was 1.1% higher at $22,980, after hitting $23,075, its highest since May 10.
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