LONDON: Copper prices rose in London on Wednesday as a weaker dollar and declining exchange stockpiles provided support, though concerns about the lack of major policy stimulus from top consumer China capped gains.
Three-month copper on the London Metal Exchange (LME) was up 0.4% at $8,521.5 per metric ton by 1122 GMT.
A key Chinese parliament meeting this week failed to deliver on market hopes for a big stimulus package to revive its property sector and kept copper, used in construction, under pressure.
“The low level of housing starts will continue to weigh on industrial metals demand, given the lag between starts and metals usage,” said ING commodities analyst Ewa Manthey.
“Until the market sees signs of a sustainable recovery and economic growth in China, we will struggle to see a long-term move higher for metals,” she added.
Copper gains capped by persistent demand concerns
China’s exports growth likely slowed in the January-February period, a Reuters poll showed on Wednesday, suggesting manufacturers are still struggling for overseas buyers.
The dollar index was down on Wednesday, making copper and other dollar-priced metals more attractive for buyers using other currencies.
Copper inventories in the LME-registered warehouses continued to slide and reached their fresh six-month low, the daily LME data showed.
Meanwhile, nickel prices fell with improved supply prospects from top producer Indonesia and were last down 0.7% at $17,630 per ton. A downtrend in China’s prices of stainless steel, the main consuming sector for nickel, further weighed on sentiment.
Zinc was up 1.0% at $2,478.5 after hitting the highest since Feb. 2 of $2,480.
Mine supply remains the key constraint on zinc, which should continue to support prices, Bank of America said in a note. It expects zinc prices to average $2,375 in 2024.
LME aluminium rose 0.4% to $2,236, tin added 1.1% to $27,045, while lead gained 0.9% to $2,064.
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