LONDON: Copper prices rose on Friday as technical factors and lower available stocks supported recovery from the previous session’s six-week low, though gains are likely to be kept in check by cautious trading ahead of the Chinese New Year and strong dollar.
Three-month copper on the London Metal Exchange (LME) rose 0.3% to $8,330.5 a metric ton by 1537 GMT, heading for a weekly fall of 0.1%, its fourth week of declines.
It hit $8,245 on Thursday for its lowest since Dec. 6. “In the here and now, wider risk markets and some of our metals are exhibiting oversold technical pictures with some short-term buy signals,” said Al Munro at broker Marex, adding that gains may not be sustained over coming sessions.
On-warrant copper stocks in LME-registered warehouses fell to a four-month low after fresh cancellations, daily LME data showed. “Official exchange inventories are much lighter than historically in similar bearish macro situations across the majority of the complex,” Munro said.
On the technical front, copper faces resistance from the 200-day moving average at $8,373 while the 100-day moving average supports it at $8,289. In top metals consumer China, refined copper output rose by 13.5% in 2023, official data showed.
Beijing has instructed heavily indebted local governments to delay or halt some state-funded infrastructure projects, sources said, as the country struggles to contain debt risks while trying to stimulate the economy.
“People are starting to anticipate some financial stimulus (from China) which will support (metals) prices,” one trader said.
Meanwhile, the dollar rose and was heading for a weekly gain, making dollar-priced metals more expensive for buyers using other currencies. In other metals, LME aluminium fell by 0.2% to $2,160 a ton after touching its lowest since Dec. 14 at $2,159.5.
Zinc added 0.1% to $2,464, lead advanced 1.6% to $2,109 and nickel was up 0.2% at $16,190. Tin gained 0.5% to $25,475 a ton after hitting its highest since Dec. 28 at $25,710.
Tin mine closures in Myanmar and Indonesia’s coming presidential election kept supply risks in check, said Tom Langston, analyst at the International Tin Association.
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