LONDON: Copper prices rose in London on Wednesday with more upbeat demand prospects from top metals consumer China, ignoring pressure from rising inventories and caution ahead of the US Federal Reserve’s rate decision later in the day.
Three-month copper on the London Metal Exchange rose 0.7% to $8,350 per metric ton by 1608 GMT.
The metal, used in power and construction, is rising for the first time in four sessions as concerns about consumption from China, the world’s second-largest economy, in general and its crisis-hit property sector in particular begin to ease.
“People are turning a bit more optimistic on China with evidence that things start to bottom out there,” said Dan Smith, head of research at Amalgamated Metal Trading.
“There is still a lot of evidence that the Chinese housing sector is in poor state, but the demand for base metals as a whole is doing quite well there and the sharp fall for housing prices in the country’s main cities is starting to ease.”
The US currency index, which touched a six-month high last week, was down, making dollar-priced metals more attractive for buyers holding other currencies.
Confident the Federal Reserve will leave interest rates unchanged, investors are more focused on the release of new economic forecasts on Wednesday.
Meanwhile, copper inventories in LME-registered warehouses which have been rising since mid-July, are at the highest since May 2022 at 155,700 tons after deliveries of 6,100 tons, mainly to New Orleans, LME daily data showed.
On the technical front, copper is facing resistance from the 100-day and 21-day moving averages at $8,388 and $8,395, respectively.
LME aluminium added 1.7% to $2,253 a ton. China’s August imports of the metal rose by 31.5% from July, customs data showed. Zinc rose 2.1% to $2,549.5, lead was down 0.4% at $2,211, tin eased 0.1% to $26,070 and nickel fell 1.7% to $19,590.
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