LONDON: Copper prices clawed higher on Friday on some upbeat signs of recovery in top metals consumer China and as speculators reacted to bullish short-term technical signals.
Three-month copper on the London Metal Exchange gained 0.7% to $8,044 per metric ton by 1000 GMT and was set to add 1.2% on the week, the strongest weekly performance in more than a month.
“From a short term perspective, we’ve managed to hold above a very key area of support, which has given a little confidence back to the market,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
LME copper has bounced after touching an 11-month low of $7,856 on Monday to nudge above the 21-day moving average on Friday, a bullish short-term trading signal.
“What was a pretty tough month has been somewhat mitigated by those announcements from China,” Hansen added.
Copper falls as stronger dollar offsets China stimulus
Profits at China’s industrial firms extended gains for a second month in September, adding to signs of a stabilising economy as the authorities launched a burst of supportive policy measures.
Despite the recent gains, it will be a struggle for copper to rally further, Hansen said.
“There are still the economic worries about not only China, but the wider world, we have not seen anything which could trigger a meaningful extension to the upside.”
LME nickel gained 0.8% to $18,220 a metric ton, but was set for its biggest weekly decline in a month, pressured by a surplus in the global market.
“We forecast a surplus in the global nickel market in 2023 of 307,000 tons, expanding from the surplus of 126,000 tons seen in 2022,” BMI analysts said in a note.
However, LME nickel prices could rally to around $20,000 a ton on stretched fund short positioning, supply risk in top producer Indonesia and potential further Chinese easing, Citi analysts said.
Also supporting metals was a pause in a rally in the dollar index, making greenback-priced commodities less expensive in other currencies,
LME aluminium edged up 0.1% to $2,199 a ton, zinc advanced 1.2% to $2,463, lead added 0.5% to $2,104 while tin rose 0.2% to $24,860.
Comments
Comments are closed for this article.