LONDON: Copper prices rose in London on Wednesday as a weaker dollar and declining exchange stockpiles provided support offsetting concerns about the lack of major policy stimulus from top consumer China.
Three-month copper on the London Metal Exchange (LME) was up 0.9% at $8,571.5 per metric ton by 1437 GMT.
The dollar index was down on Wednesday after the US Federal Reserve Chair Jerome Powell said that continued progress on inflation “is not assured,” though the central bank still expects to reduce its benchmark interest rate later this year.
Weaker US currency makes 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.
However, 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 for the longer term.
“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.
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.
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