LONDON: Copper prices came under pressure on Monday as a lack of detail on economic stimulus in top consumer China and a firmer dollar reinforced expectations of weak demand.
Benchmark copper on the London Metal Exchange (LME) was down 0.2% at $8,546 per metric tonne at 1022 GMT. Prices of the metal used in the power and construction industries touched $8,634 a tonne on Friday for its highest since May 10.
“Copper is reacting to the lack of anything definitive on stimulus from China,” one metals trader said, adding that volumes were thin and likely to remain so on Monday because of a public holiday in the United States.
“The higher dollar isn’t helping and we are in a seasonally slow period for industrial metals demand.”
A stronger U.S. currency makes dollar-priced metals more expensive for holders of other currencies, which could undermine consumption.
Copper pulls back from five-week high as inventories rise
However, traders said expectations that China will cut benchmark rates on Tuesday, the first such easing in 10 months, will help to shore up sentiment in industrial metals markets.
Providing some support for copper are falling stocks in warehouses monitored by the Shanghai Futures Exchange, which have dropped 76% to 61,090 tonnes since Feb. 24.
Traders are also watching copper stocks in LME-approved warehouses, where cancelled warrants – metal earmarked for delivery – amount to 37% of total stocks of 88,425 tonnes.
Elsewhere, LME prices of tin for near-term delivery remain elevated owing to a solitary company holding more than half of the inventory in LME-registered warehouses, fuelling concern over availability on the LME market.
The premium for cash tin over the three-month contract closed at $1,292.50 a tonne on Friday, close to the 16-month high hit this week.
Three-month tin was down 1% at $26,695 a tonne.
In other metals, aluminium fell 1.3% to $2,242, zinc ceded 1.5% to $2,442, lead was litle changed at $2,142 and nickel was down 1.5% at $22,690.
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