BEIJING: London copper prices were steady on Monday as the US dollar weakened, while investors gauged demand outlook from top consumer China after its central back surprised markets by keeping its medium-term policy rate steady.
Three-month copper on the London Metal Exchange held ground at $8,350 per metric ton by 0538 GMT, having shed 1.5% last week.
The dollar ebbed as bets for a Federal Reserve’s rate cut in March have gathered steam after data on Friday showed US producer prices unexpectedly fell last month. A weaker US dollar makes it cheaper for traders to buy the greenback-priced commodity.
China’s central bank left the medium-term policy rate unchanged on Monday, defying market expectations for a cut as a weaker currency limited the scope of monetary easing in the near term to boost the economy.
Investors are waiting for China’s release of its fourth-quarter gross domestic product (GDP) and December industrial production on Wednesday.
The most-traded February copper contract on the Shanghai Futures Exchange lost 0.3% to 67,860 yuan ($9,463.78)per ton.
Analysts at GF Futures noted that pre-holiday replenishment from end-users were weaker than usual, spot market in China will likely remain tepid.
Copper slips, but prospect of tight supplies sustains sentiment
The market, however, was supported by mine-side disruption.
A slump in copper charges in China as smelters scramble for raw material could further erode margins for Chinese firms and potentially lower their production of refined copper.
LME aluminium nudged 0.1% higher to $2,220.50 a ton, lead was up 0.1% at $2,092.50, tin rose 1.1% to $24,890 and zinc gained 0.8% to $2,534.50, while nickel fell 0.3% to $16,295.
SHFE nickel lost 1.2% to 127,390 yuan a ton, lead slid 1.6% to 16,200 yuan, aluminium eased 0.3% to 18,940 yuan, while tin rose 1.3% to 209,210 yuan, zinc gained 0.2% to 21,175 yuan.
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