Copper prices slipped on Monday due to a higher dollar, while losses were capped by improving factory activity data from top consumer China and low stocks of the metal in Shanghai.
Benchmark copper on the London Metal Exchange (LME) was down 0.3% at $8,533 per metric ton at 1122 GMT. Prices of the metal used in the power and construction industries rose to five-month highs of $8,716 last week.
Traders said funds sold copper after the dollar started to climb in early European trade. A higher U.S. currency makes dollar-priced metals more expensive for holders of other currencies, which could subdue demand.
Surveys of purchasing managers (PMI) in China showed manufacturing activity expanded at a quicker pace in December due to stronger gains in output and new orders, while new export orders fell at a slower pace.
“Positives are China PMIs beating expectations and inventories in Shanghai, but the dollar has started the year on a much stronger footing,” a metals trader said.
Copper dips, but heads for yearly rise on healthy Chinese demand
Copper inventories in warehouses monitored by the Shanghai Futures Exchange (ShFE) at 30,905 tons have dropped nearly 90% since late February.
In Shanghai’s bonded warehouses, copper stocks at 6,500 have fallen 96% since the middle of March.
However, doubts about demand prospects can be seen in the discount for the cash over the three-month copper contract trading near 31-year lows.
Elsewhere, zinc fell 1.2% to $2,631 a ton as the market fretted about demand from China’s crisis-hit property sector.
Expectations of weaker demand for the metal used to galvanise steel are also highlighted by the higher discount for the cash over the three-month zinc contracts at $21 a ton compared with a premium of $11 only two weeks ago.
In other metals, aluminium was down 0.1% at $2,381, lead retreated 0.6% to $2,055, tin gained 0.3% to $25,500 and nickel rose 0.9% to $16,760.
Comments
Comments are closed for this article.