LONDON: Copper prices steadied on Monday as the market paused to take stock after the recent run higher, but above consensus industrial production data from top consumer China and a softer dollar supported sentiment.
A rare agreement by China’s copper smelters to cut output fuelled a rally last week that propelled prices to 11-month highs of $9,098 a metric ton on the London Metal Exchange (LME).
On the Shanghai Futures Exchange (ShFE) prices of the metal used in the power and construction industries hit a record high at 73,440 yuan earlier on Monday.
Traders said a breach of key technical levels had created momentum for LME copper to break through the $9,000 level. It was down 0.1% at $9,061 a ton at 1039 GMT.
“The reaction to Chinese copper smelters cutting back was big … It’s looking a little bit toppy now,” said Dan Smith, head of research at Amalgamated Metal Trading. “Chinese macro data is definitely improving.”
China’s industrial output rose 7% in January and February, the fastest pace in almost two years and well above expectations for a 5% increase.
LME copper slips on uncertainty over China smelter cuts
However, a protracted crisis in China’s property sector, a key pillar of the economy, remains a major concern and Monday’s data offered little relief on that front with declines in property investment narrowing in January-February.
In other metals, nickel came under pressure from higher stocks in LME registered warehouses, which are at two-year highs of 77,424 tons.
However, stronger than previously expected demand is likely to support prices of the stainless steel ingredient.
Three-month nickel was down 0.8% at $17,930 a ton.
Overall, metals were supported by a lower U.S. currency, which when it falls, makes dollar-priced commodities cheaper for holders of other currencies.
In other metals, aluminium fell 0.1% to $2,272, zinc was flat at $2,561, lead slipped 0.4% to $2,121 and tin retreated 0.7% to $28,465 a ton.
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