LONDON: Copper prices in London fell on Wednesday as market optimism faded over the extent to which top consumer China would deliver stimulus and drive demand for the metal used in the power and construction industries.
Benchmark copper on the London Metal Exchange (LME) was down 0.2% at $8,535 a metric tonne at 0947 GMT.
“Last week there was a lot of news coverage expecting more stimulus in China. However, our sense is that whether it is monetary, property or infrastructure stimulus, any stimulus is more likely to be targeted and fairly moderate,” said Amelia Xiao Fu, head of commodity markets strategy at BOCI Global Commodities.
She added, however, that copper could still find support from the growth in sectors related to the energy transition, such as electric vehicles, renewable energy storage and charging stations, which has offset weakness elsewhere.
In China, Shanghai copper prices hit a two-month high after the copper premium in the Chinese spot market rose to an eight-month high, partly because of a weaker yuan.
Copper slips as China rate cuts disappoint
However, trading volumes in China were expected to be limited as the Chinese markets close on Thursday and Friday for the Dragon Boat Festival.
Dollar-priced metals were also pressured by a stronger dollar ahead of Federal Reserve Chair Jerome Powell’s appearance before Congress, where he is expected to strike a hawkish tone.
LME copper stocks fell by 1,600 metric tonnes to a one-week low of 84,725.
Among other metals, LME aluminium fell 0.7% to $2,214, after breaking below the 21-day moving average of $2,239. The LME total aluminium stocks fell by 4,750 metric tonnes to 550,925, their lowest since mid-April.
Zinc rose 0.2% to $2,365, lead lost 0.2% to $2,140, tin gained 0.3% to $26,935 and nickel slipped 1.0% to $21,825.
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