LONDON: Copper prices in London rose for the first time in three sessions on Tuesday, on hopes that next week’s annual parliamentary meeting in top consumer China could provide clues on further economic stimulus.
Three-month copper on the London Metal Exchange (LME) gained 0.3% to $8,487 a metric ton by 1039 GMT. On the technical front, copper, used in power and construction, is supported by the 50-day moving average at $8,450.
“It is likely we will see more metals-intensive stimulus from China announced in March around the NPC (the National People’s Congress) meeting. U.S. economic data could also weaken from here, weighing on the dollar and fuelling renewed rate cut expectations,” Citi said in a note.
Citi expects copper to reach $8,800 within three months.
Demand in China, which was expected to pick up with the end of the Lunar New Year holiday, has so far disappointed, Ewa Manthey, a commodities strategist at ING, said.
“Copper is likely to remain volatile until there are clear signs of demand pick up during upcoming China’s construction season. Commodity-intensive stimulus is needed to support short to medium-term demand growth,” Manthey added.
Copper slips on firmer dollar, higher China inventories
Aluminium rose for the first time in four sessions and was last up 0.9% to $2,200.5 per ton. Its fall last week dragged it below major moving averages, and the first resistance will be coming from the 21-day and 200-day moving averages at around $2,220.
Nickel prices rose by 0.9% to $17,330, extending their recent rally caused by funds’ short covering and supply concerns linked to lengthy Indonesian mining license renewals.
However, analysts expected the rally to fade soon due to a surplus in the global market driven by Indonesia’s production growth.
“We expect prices to return to the recent trading range of $16,000-16,500, where the market remains fundamentally balanced,” Daria Efanova at brokers Sucden Financial said.
Elsewhere, LME zinc was up 0.4% at $2,435, while lead climbed 0.3% to $2,103.5. Tin rose 0.5% to $26,200.
Comments