LONDON: Copper prices were supported by stronger credit data from top consumer China and a lower dollar on Wednesday ahead of U.S. inflation data, but doubts about a significant pick up in demand weighed on sentiment.
Benchmark copper on the London Metal Exchange (LME) traded 0.7% higher at $8,382 a metric ton in official rings. Prices have ranged between $8,500 and $8,100 for much of the last three weeks.
New bank loans in China jumped more than expected in June, and total social financing data watched by analysts for clues to industrial metals consumption exceeded expectations.
“China credit data has given the market a firmer tone, but there is caution ahead of U.S. CPI,” a metals trader said. “China’s property sector is a concern.”
Markets are focused on U.S. inflation data. The figures could give a steer on how much more the Federal Reserve might raise interest rates by, the direction of the U.S. currency and industrial metals demand.
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Also on the agenda this week is China trade data and its housing market, which accounts for significant amounts of industrial metals demand.
A Reuters survey showed China’s export slump is expected to have accelerated in June, as sluggish overseas economies struggling with inflation and rising interest rates buy up fewer goods from Chinese factories.
Some support for copper prices comes from falling stocks in LME registered warehouses, which at 54,450 tons are down 45% since early June.
However, the discount for cash copper over the three-month contract suggests a lack of concern about supplies on the LME.
On the technical front, upside resistance for copper comes in at $8,405 and $8,450 where the 21-day and 200-day moving averages are. Support is at $8,330, the 50-day moving average.
In other metals, aluminium rose 0.8% to $2,185 a metric ton, zinc added 0.8% to $2,374.5, lead gained 0.9% to $2,070, tin advanced 0.5% to $28,100 and nickel climbed 2% to $21,120.
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